The Coal to oil price ratio (see below) had stayed at 1.3 and a bit through the whole of the 50s and 60s. It had jumped by 30% in 1970, and continued rising into 1973, to 2.4 relative to oil, or up 70%, making the "oil embargo" a total joke when you consider that the result was that in 1974 the price was the same in relative terms. This means that the oil price change then was a result of general conditions of increased demand for coal and simple monetary inflation. Obviously, the oil story is that you can't do an embargo on one country when the oil travels the world.

The appropriate level for coal to oil should still be around 1.4 1.5, and the only substantial departure was the coal spike of 69-73 to the coal side, and the aftermath of the Iranian revolution on the oil side, which revolution actually did cause a panic and raised oil prices (and "just in case" inventories) to absurd levels. The relative price of coal fell from 2 in 1978 to a low of 0.8 in 81, from whence the historic relationship resumed at about 1.6.

When compared to CPI, the relative price of coal to general goods went up 50% in 1970, and another 65% in 1974. Overall, coal prices rose 150% relative to general prices, rising more strongly than oil till the Iranian oil panic.

The coal price stayed at about 0.2 throughout the 50s and 50s and oil at about 0.14-0.15. NG at 0.08 at a rather marginal use.

The Clean air act which made most of the coal (and sour oil) unburnable, caused a rise in the demand for cleaner coals, which became the whole of coal production. As a result of the coal shortage invented by congress, coal prices rose relative to everything else by 150% (peaked in 74 at 0.52), most of the rise within 1970 and then 1974. Oil rose in 1974 as a result of the "embargo" in part, but since coal prices rose too, it is more probably a matter of either general energy demand in this period, or that combined with simple inventory speculation driven by the monetary inflation of the time.

The actual oil shock was the Iran crisis that pushed relative crude prices to another double - even a double against coal. It was a panic driven by the Iranian disaster.

NG emerged as the cleaner and less capital intensive way to produce electricity, and followed coal up to reach a steady relative price, with Utils using the cheaper of the two according to market prices.

Over time, the coal shock receded to bring its price back in line with consumer goods prices as it was through the 50s and 60s. NG went through the same process outside of the price spike of last year. As we speak, oil fields are being redrilled for gas (and oil) all over the oil patch. Where the large oil companies left for deep water and the various Caspian fields, the small ones are drilling the old fields. Gas pipelines are on the way, and the result will be resumption of the old and consistent relationship.

The OPEC and political actions show up as substantially higher volatility in the relative price oil charts where the old ratio of oil prices to CPI has been re-attained, but volatility has never been quieted down, most notably because of OPEC decisions. The appropriate price for oil is ultimately in the consumer's hands. If oil prices are too high the consumer buys less. If too low, he buys more. The US consumer, as opposed to a German, French or Japanese, not to speak of Chinese and Koreans, is less sensitive to oil prices because it is a more minor portion of his expenses. Most notably that is because the American's production is higher than that of his counterparts elsewhere. Though much of this is imported productivity, the fact remains that the US trade relationship is roughly at equilibrium as exports are 80% of imports.

Since developing Asia must provide $100 billion in loan repayments every year, and the rest of the world has more than another $100 billion, at least the first $200 billion of the trade deficit are "pull" type rather than being pushed out of US monetary expansion. It is, therefore, structural, and there is little one can do to change it but to lower dollar indebtedness by debt to equity swaps and increased net exports by debtors. A few bankruptcies would help too, but too much "face" is lost when this happens, and many a favored crony with heavy guanxi may lose control of a politically sensitive company. And so we continue with the trade deficit, 1/2 of which is simply the result of business and governments in developing nations borrowing $2.5 trillion at 9-12% and trying to repay it by exporting the same products their neighbors are producing. Even the IMF stats show that some $200 bil a year simply evaporate in interest payments on international debt.

Chuck it to government imposed industrial policy that this has happened, joined with some Japanese inspired realy bad banking practices. (All of the Asian developing nations tried to follow the Japanese model, producing the same stuff Japanese were already producing, and playing "chicken" with each other as to who will stop construction of new plants before the market is glutted.)View
Yesterday's Discussion.

First, it was the Liberty that was giving out Israeli troop movements to Egypt. Its bombing was self defense. The reason the US gov hushed the issue is not because of some attempt at protecting Israel but because Israel's intercepts from the Liberty's transmissions would have destroyed countless carreers in the State Department and the CIA and NSA organizations, exposing publicly that the US gov does the exact opposite of what it says.

It's been 50 years since some analysts came to the conclusion that Militant Islam and the West are mutually exclusive and can not be neighbors. Simple exposure of plain old people in the Islamic world to the West rids them of much of their allegiance to the narrows of Militant Islam. Though many of the plain folks would vote for it if given a chance, disenchantment comes quickly if exposure to the West has "contaminated" the mind of the people.

Thus it is implicit in the pursuit of Militant Islam that either isolation and severely regimented control be imposed on the people, or they will simply become Westernized by seeing TV and listening to Radio, as well as communicating with family and friends abroad. This is why Saudis do not let their people on the net. That is why the Taliban destroyed all the TVs and VCRs they could find.

The second point is the oil. Since the oil in the gulf is quite simply the cheapest to produce, Western oil companies would buy off their governments in order to obtain access. Thus leading to the contact of the cultures and a threat to the Arabian Feudal power structure.

Next issue is externalization of discontent, a.k.a. scapegoating. "We are poor because the great Satan America" took away our wealth. In Arabian culture, which is Feudal, all wealth is extorted, and its producer, the phelachin or the craftsman are both viewed with disdain, as is the merchant, which is barely tolerated. All are culturally predisposed to believe that if you live in a great house you must have had to beat the stones out of countless serfs. Somehow, you must have taken it from "us", a great injustice.

Before the trade around the silk road by boat became dominant, the Arabians lived off of the southern route where the great Sultans taxed it half to death. After destroying internal trade throughout the Patan, Pharsi, Aramaic, Egyptian, Berber, Mogul, and then Byzantine lands, they had pillaged all that there was, and were culturally averse to rebuilding any of it. Then decline set in, deepened by the loss of the land route to Western shipping which was not taxed, as opposed to the land route which was nearly confiscatory.

Thus we have a people who can not conceive of how a country becomes rich, who have only a dual history of plunder and serfdom, and believe that "non believers" are less than human. Add to that the modern version of Pan Arabian Nationalism imported from Nazi Germany and incorporated into Militant Islam, and you have the elements you need in order to create a hatred born of jealousy among the leadership, a fear of their loss of power if Westernization were to occur, and a people downtrodden by the isolation imposed on them as a result of this fear. All you need now is to give them a big chunk of unearned change with which to buy arms and you have the makings of endless conflict with a beligirent enemy who knows only that your mere existence is a threat to him.

The old analysis came up with two options: take the oil and keep the unreformed Arabs away from it, or don't use the oil at all and let Pan Arabia live in decrepit isolation on to of an untapped treasure. Anyone who tries to go in between these two choices will cause the cultural tensions to rise through contact, and allow military resources to be accumulated in the hands of these countries.

While I don't fully subscribe to this view, I do recognize much of it as true. This was already discussed in Marshal's time, before the various versions of the Baath took over the kingdoms. It is not to his credit that he did not see any of it coming, nor is it to his credit that he did not recognize the simple fact that the Western oil workers themselves became sources of tension sufficient to bring about the same reaction that support for Israel brought. Contact with the Western way is a threat to the power structure of a feudal society. Thus getting the oil means creating the contact, which means creating the conditions that must lead to conflict.

Saud's fanatical hatred of Jews was not shared that broadly in intensity, but was nearly unanimous in the xenophobic Arab world to some extent - with Jews hated about as much as anyone else who was not a Moslem.

There isn't (yet) an alternative for *cheap* M.E. crude !
The absurd over-valuation of the US$, against all other currencies, perpetuates the dependancy of the US/Europ on these cheap ME crude reserves. All other alternatives could be exploited, profitable, if the dollar could/should/would, come down from its overvaluation.
That's what all the present (and past) geo-political suffering and manoeuvering, is all about.

That's why high eyes are casted to the former USSR regional wealth on cheap resources. They can be exploited (again) with rubble/rubble paper costs. Most of the profits of all these vital resources must meet the condition that they flow to the users/consumers of these resources. This demands a very specific strategy for geo-political dominance that remains waterproof. Builded on absolute power and might. Opportunistic sharing of these wealths and install a peacefull trade relation on an equal basis, doesn't seem to be possible or desired. That's why *confrontation* will remain on the order of the day.

At present, the decade's old capacity of Saudi Arabia (+ allies) as regulating *swing-producer*, is in danger.
If this mechanism is going to fail, w'll see dramatic changes. I'm afraid, this has already been planned/projected.

The ME-crude-policy/psychology, changed, after the Gulf war.
From relatively quiet and peacefull into more pro-active management of crude's value versus the dollar.
Globalization and anti, hasn't yet been associated (focussed) with the specifics of dollar-dominance, yet.

The ideal alternative for internal islamist, renaissance, should be, to leave them alone, with as little interference as possible. But in a world as it is, the western economies are not going to give back an inch, of the aqcuired prosperity, from absurd cheap resources. A very old problem, to be faced with the same fear and arrogance.

With the inherent atrocity of terror, the weak, have found the Achillus heel. The unfortunate succes of the WTC attack/murder, is therefore a tumbling point of utmost importance. The chosen way of handling this, with the classic confrontational respons, is imvho, a big mistake.
In Europ, terror has been used/abused (!) long before 11/9.
We haven't been bombing and the bulk of terror, faded away.
Far from being a model pacifist, I'm just stating the fact that this non-confrontational policy, worked, and resulted in relative peace and prosperity for a broad majority of increasing participants.

Pretending that the resources under the umbrella of weak currencies, are, the servants of the western capitalistic lords, is imo, outdated. And, indeed, it took me quite some time to adjust to this classic thought, myself.

The US/UK, present policy, will inevitably lead to more tension. With breaking points for the different factions in the coalition and no final - lasting solution for the underlying problem of exaggerated imbalance.
It will be the US-dollar that is to be challenged. And with it, peace and prosperity.

http://64.39.19.39/I don't think that we have any disagreement on coal. However, the Arab Oil Embargo as "being a joke" misses the point that autos lined up for petrol and not for coal. Granted I agree that the overall energy issue could be relieved with greater extraction and use of coal. However, there are certain realities such as the environmental movements opposition to coal and oil fired power. I also agree that this position is irrational. The environmentalist PR campaign against use of coal and hydrocarbons along with the NIMBY attitude toward power plants, pipelines, mines, refineries and transmission grids in general make public political support difficult. A couple of prime examples we can examine are the ANWR drilling debate and the refusal by the state of California to prepare for the inevitable power crisis they endured last year.

As far as the USS Liberty incident - sorry but I don't see where machine-gunning unarmed defenseless US sailors in lifeboats was crucial to the existence of Israel. Two heroic Israeli pilots refused to murder these young Americans and as their reward they each served 18 years in an Israeli prison. Israel claims they mistook our ship for the out-of-service Egyptian horse carrier El Quseir and that we brought the attack upon ourselves by operating in a war zone without displaying a flag. Not so. The USS Liberty was in international waters, far from any fighting, and flew a bright, clean, new American flag. Liberty's intercepts also may have shown Israel seized upon rising Arab-Israeli tensions in May-June, 1967 to launch a long-planned war to invade and annex the West Bank, Jerusalem, Golan and Sinai. Liberty was shattered but defiant, her flag still flying. Israeli attacks killed 34 U.S. seamen and wounded 171 out of a crew of 297, the worst loss of U.S. naval personnel from hostile action since World War II. (see link above).

Ally? I think not. Besides, the USS Liberty communications were intercepted and they reveal that Israel was very likely the primary aggressor. And we haven't even discussed other incidents such as the traitor Jonathon Pollard who used high security clearance to engage in espionage. He is no different than John Walker or any other traitor. Yet Israel presses for a presidential pardon over strong opposition from the Pentagon (what's left of it). But now we really digress. My point is that we would have been much better off leaving these Middle Eastern peoples to what they do best - slaughter each other. All we really want is the oil.

"it was the Liberty that was giving out Israeli troop movements to Egypt. Its bombing was self defense. The reason the US gov hushed the issue is not because of some attempt at protecting Israel but because Israel's intercepts from the Liberty's transmissions would have destroyed countless careers in the State Department and the CIA and NSA organizations, exposing publicly that the US gov does the exact opposite of what it says." ORO (11/1/01; 01:41:41MT - usagold.com msg#: 64484)

ORO:
Would you mind citing a source for the information and allegation contained in your remark above?

The Liberty incident has been well-documented by the men who served aboard her during the incident on their website (see Black Blade's reference). Your allegation above is less publicized. In fact, it would seem to fly in the face of logic when the question is asked: Why would the US be transmitting Israeli troop movements to Egypt? Why would a ship have to be positioned there to do that? And why haven't the Israelis themselves made the claim you so blithely proclaim without any supporting evidence?

The ILO said an Asian revival is needed Twenty-four million job opportunites - more than the population of Texas, or Australia - will disappear by the end of 2002 because of the global economic slowdown.

WASHINGTON - The economic slump in the United States is expected to drag the world into recession, making it difficult to predict when a recovery might begin, the World Bank said yesterday. The pessimistic report came after the U.S. economy recorded its sharpest contraction in more than a decade during the third quarter, with gross domestic product slipping at an annual rate of 0.4%.

Black Blade: Time to grab some Gold and Silver portfolio insurance. I see that the Pied Pipers are in top form this morning giving dubious explanations why the market has bottomed. The same old tired clich�s.

Whatever the real reasons are for US involvement in Afghaniston, and for this so called war against 'Terrorism', there appears much to show that it is not all connected to Sept 11th. The whole business smells worse than a rotten (red) herring.

EIA Energy Administration Information

September 2001
Afghanistan

The information contained in this report is the best available as of September 2001 and can change.

General Background
Afghanistan's significance from an energy standpoint stems from its geographical position as a potential transit route for oil and natural gas exports from Central Asia to the Arabian Sea. This potential includes the possible construction of oil and natural gas export pipelines through Afghanistan, which was under serious consideration in the mid-1990s. The idea has since been undermined by Afghanistan's instability. Since 1996, most of Afghanistan has been controlled by the Taliban movement, which the United States does not recognize as the government of Afghanistan.

On December 19, 2000, the UN Security Council imposed additional sanctions against Afghanistan's ruling Taliban movement (which controls around 95% of the country), including an arms embargo and a ban on the sale of chemicals used in making heroin. These sanctions (Resolution 1333) are aimed at pressuring Afghanistan to turn over Osama bin Laden, suspected in various terrorist attacks, including the August 1998 US Embassy bombings in Kenya and Tanzania. These latest sanctions are in addition to sanctions (Resolution 1267) imposed on Afghanistan in November 1999, which included a freeze on Taliban assets and a ban on international flights by Afghanistan's national airline, Ariana. The Taliban reacted sharply to the new sanctions, ordering a boycott of US and Russian goods, and pulling out of UN-mediated peace talks aimed at ending the country's civil war.

On November 29, 1999, UN Secretary General Kofi Annan issued a report on Afghanistan which listed the country's major problems as follows: civil war (which has caused many casualties and refugees, and which has devastated the country's economy), record opium production, wide-scale human rights violations, and food shortages caused in part by drought.

According to the 2001 CIA World Factbook, Afghanistan is an extremely poor, landlocked country, highly dependent on farming and livestock raising. Afghanistan has experienced over two decades of war, including the nearly 10-year Soviet military occupation (which ended in 1989). During that conflict one-third of the population fled the country, with Pakistan and Iran sheltering a combined peak of more than 6 million refugees. Large Afghan refugee populations remain in Pakistan and Iran. Gross domestic product has fallen substantially over the past 20 years because of the loss of labor and capital and the disruption of trade and transport. The severe drought of 1998-2000 added to these problems.

The majority of the population continues to suffer from insufficient food, clothing, housing, and medical care. Inflation remains a serious problem throughout the country. International aid can deal with only a fraction of the humanitarian problem, let alone promote economic development. The economic situation did not improve in 1999-2000, as internal civil strife has continued, hampering both domestic economic policies and international aid efforts. Numerical data are likely to be either unavailable or unreliable. Afghanistan was by far the largest world producer of opium poppies in 2000, and narcotics trafficking is a major source of revenues.

Energy Overview
The Soviets had estimated Afghanistan's proven and probable natural gas reserves at up to 5 trillion cubic feet (Tcf) in the 1970s. Afghan natural gas production reached 275 million cubic feet per day (Mmcf/d) in the mid-1970s. However, due to declining reserves from producing fields, output gradually fell to about 220 Mmcf/d by 1980. At that time, the Jorquduq field was brought online and was expected to boost Afghan natural gas output to 385 Mmcf/d by the early 1980s. However, sabotage of infrastructure by the anti-Soviet mujaheddin fighters limited the country's total production to 290 Mmcf/d, an output level that was held fairly steady until the Soviet withdrawal in 1989. After the Soviet pullout and subsequent Afghan civil war, roughly 31 producing wells at Sheberghan area fields were shut in pending the restart of natural gas sales to the former Soviet Union.

At its peak in the late 1970s, Afghanistan supplied 70%-90% of its natural gas output to the Soviet Union's natural gas grid via a link through Uzbekistan. In 1992, Afghan President Najibullah indicated that a new natural gas sales agreement with Russia was in progress.

However, several former Soviet republics raised price and distribution issues and negotiations stalled. In the early 1990s, Afghanistan also discussed possible natural gas supply arrangements with Hungary, Czechoslovakia, and several Western European countries, but these talks never progressed further.

Afghan natural gas fields include Jorqaduq, Khowaja Gogerdak, and Yatimtaq, all of which are located within 20 miles of the northern town of Sheberghan in Jowzjan province. Natural gas production and distribution is the responsibility of the Taliban-controlled Afghan Gas Enterprise. In 1999, work resumed on the repair of a distribution pipeline to Mazar-i-Sharif. Spur pipelines to a small power plant and fertilizer plant also were repaired and completed. Mazar-i-Sharif is now receiving natural gas from the pipeline, as well as some other surrounding areas. Rehabilitation of damaged natural gas wells has been undertaken at the Khowaja Gogerak field, which has increased natural gas production.

In February 1998, the Taliban announced plans to revive the Afghan National Oil Company, which was abolished by the Soviet Union after it invaded Afghanistan in 1979. Soviet estimates from the late 1970s placed Afghanistan's proven and probable oil and condensate reserves at 95 million barrels. Oil exploration and development work as well as plans to build a 10,000-bbl/d refinery were halted after the 1979 Soviet invasion. A very small amount of crude oil is produced at the Angot field in the northern Sar-i-Pol province. It is processed at a primitive topping plant in Sheberghan, and burned in central heating boilers in Sheberghan, Mazar-i-Sharif, and Kabul. Another small oilfield at Zomrad Sai near Sheberghan was reportedly undergoing repairs in mid-2001.

Petroleum products such as diesel, gasoline, and jet fuel are imported, mainly from Pakistan and Turkmenistan. A small storage and distribution facility exists in Jalalabad on the highway between Kabul and Peshawar, Pakistan. Turkmenistan also has a petroleum product storage and distribution facility at Tagtabazar near the Afghan border, which supplies northwestern Afghanistan.

Besides oil and natural gas, Afghanistan also is estimated to have 73 million tons of coal reserves, most of which is located in the region between Herat and Badashkan in the northern part of the country. Although Afghanistan produced over 100,000 short tons of coal annually as late as the early 1990s, as of 1999, the country was producing only around 1,000 short tons.

Afghanistan's power grid has been severely damaged by years of war. Currently, the ruling Taliban are concentrating on rebuilding damaged hydroelectric plants, power distribution lines, and high-voltage cables. Production of power by Afghanistan's hydroelectric dams was negatively affected by the drought of 1998-2000, resulting in blackouts in Kabul and other cities. Increased rainfall in 2001 has improved power production. The Kajaki Dam in Helmand province near Kandahar is undergoing the addition of another generating turbine with assistance from the Chinese Dongfeng Agricultural Machinery Company. This will add 16.5 megawatts (MW) to its generating capacity when completed. Transmission lines from the Kajaki Dam to Kandahar were repaired in early 2001, along with a substation in the city, restoring supplies of electricity. The Dahla Dam in Kandahar province also has been restored to operation, along with the Breshna-Kot Dam in Nangarhar province, which has a generating capacity of 11.5 MW. The 66-MW Mahipar hydro plant also is now operational.

Turkmenistan supplies electricity to much of northwestern Afghanistan. In October 1999, Afghanistan announced that it had reached agreement with Turkmenistan for electricity imports into northwestern Afghanistan, including power to the city of Herat and the Herat cement plant. Another transmission line has been built from Turkmenistan to the city of Andkhoy, and one was under construction in 2001 to Sheberghan. Electricity has previously been imported from Uzbekistan for Mazar-i-Sharif, but supplies were cut off during the winter of 1999 due to payment arrears.

Regional Pipeline Plans
In January 1998, the Taliban signed an agreement that would allow a proposed 890-mile, $2-billion, 1.9-billion-cubic-feet-per-day natural gas pipeline project led by Unocal to proceed. The proposed pipeline would have transported natural gas from Turkmenistan's 45-Tcf Dauletabad natural gas field to Pakistan, and most likely would have run from Dauletabad south to the Afghan border and through Herat and Qandahar in Afghanistan, to Quetta, Pakistan. The line would then have linked with Pakistan's natural gas grid at Sui. Natural gas shipments had been projected to start at 700 Mmcf/d in 1999 and to rise to 1.4 Bcf/d or higher by 2002. In March 1998, however, Unocal announced a delay in finalizing project details due to Afghanistan's continuing civil war. In June 1998, Gazprom announced that it was relinquishing its 10% stake in the gas pipeline project consortium (known as the Central Asian Gas Pipeline Ltd., or Centgas), which was formed in August 1996. As of June 1998, Unocal and Saudi Arabia's Delta Oil held a combined 85% stake in Centgas, while Turkmenrusgas owned 5%. Other participants in the proposed project besides Delta Oil include the Crescent Group of Pakistan, Gazprom of Russia, Hyundai Engineering & Construction Company of South Korea, Inpex and Itochu of Japan

On December 8, 1998, Unocal announced that it was withdrawing from the Centgas consortium, citing low oil prices and turmoil in Afghanistan as making the pipeline project uneconomical and too risky. Unocal's announcement followed an earlier statement -- in August 1998 -- that the company was suspending its role in the Afghanistan gas pipeline project in light of the recent U.S. government military action in Afghanistan, and also due to intensified fighting between the Taliban and opposition groups. Unocal had previously stressed that the Centgas pipeline project would not proceed until an internationally recognized government was in place in Afghanistan. To date, however, only three countries -- Saudi Arabia, Pakistan and the United Arab Emirates -- have recognized the Taliban government.

Besides the gas pipeline, Unocal also had considered building a 1,000-mile, 1-million barrel-per-day (bbl/d) capacity oil pipeline that would link Chardzou, Turkmenistan to Pakistan's Arabian Sea Coast via Afghanistan. Since the Chardzou refinery is already linked to Russia's Western Siberian oil fields, this line could provide a possible alternative export route for regional oil production from the Caspian Sea. The $2.5-billion pipeline is known as the Central Asian Oil Pipeline Project. For a variety of reasons, including high political risk and security concerns, however, financing for this project remains highly uncertain.

In April 1999, Pakistan, Turkmenistan and the Taliban authorities in Afghanistan agreed to reactivate the Turkmenistan-Pakistan gas pipeline project, and to ask the Centgas consortium, now led by Saudi Arabia's Delta Oil (following Unocal's withdrawal from the project), to proceed. Periodic meetings to discuss the project have continued. It remains unlikely, however, that this pipeline will be built.

Gas
Sheberghan Area Gas Fields The Jorqaduk, Khowaja Gogerak, and Yatimtaq gas fields are all located within 20 miles of Sheberghan
Pipeline to Mazar-i-Sharif A pipeline connects these gas fields to Mazar-i-Sharif.Gas is used for a small power plant, a fertilizer plant, and domestic use.
Local pipelines Small local pipelines near the gas fields distribute gas in small quantities to nearby villages and Sheberghan

Electricity
Kajaki Dam Located in Helmand province near Kandahar; undergoing upgrade which will add a third generating turbine and increase its installed capacity by 16.5 MW (from its current 33 MW capacity); transmission lines to Kandahar repaired in early 2001.
Mahipar Dam Installed capacity of 66 MW.Repaired and operational.
Breshna-Kot Dam Installed capacity of 11.5 MW.Repaired and operational.In Nangarhar province near Jalalabad.
Breshna-Kot Substation Reportedly undergoing repairs.
Dahla Dam Kandahar province.Repaired and operational.
Mazar-i-Sharif Power Plant Small gas-fired power plant near Mazar-i-Sharif, with an installed capacity of 35 MW.
Transmission Lines from Turkmenistan Transmission lines from Turkmenistan supply power to several cities in northwestern Afghanistan, including Herat, and Andkhoy.A line was under construction in early 2001 to Sheberghan.

Note: This listing of Afghanistan's energy infrastructure was compiled from information available in press and media sources, and should not necessarily be considered comprehensive. Only facilities which have been reported to be functional or under repair have been included.

3. Hedge fund managers are paid through a performance or incentive fee

4. Hedge funds are often registered offshore

5. Hedge fund managers usually invest their own money in their funds

6. Hedge fund managers aim for absolute returns.

The largest sector of hedge fund managers is the global macro sector and it is here that the most famous of the hedge fund managers, George Soros, and his $20bn Quantum fund range lies. Soros has seen unparalleled returns in his funds: the Quantum Fund has achieved compounded annual returns of over 30 per cent for more than two decades. An investment of $1000 at inception of the fund would now be worth over $2m.

Event-driven managers are the next sector of hedge funds and these managers rely on 'events' to throw up investment opportunities. Short sellers are the last big group of managers and they were in their natural element in August-they short or sell (stocks) and flourish in falling markets. The short sellers shone in August, with seven of the top 10 performing funds investing in the sector. The year- to-date figures for short sellers show a 14 per cent return and the top performing fund in August's MAR/Hedge figures shows Peregrine Investment Partners achieving 56.7 per cent over the month on assets of under $1m.

The most famous of hedge funds at the time of writing is Long Term Capital Management. Its August investment board which included a number of well-respected economics and investment gurus did little to protect it from a near collapse in September 1998. From its launch, LTCM was a secretive firm and it still isn't clear exactly what the fund invested in or how, but what is clear is that its levels of leverage are what undid it so rapidly. Estimates vary but LTCM is believed to have had $200bn exposure on a capital base of $2.3bn. Leverage, or gearing, increases the volatility of an investment fund, intensifying the results so that when returns are positive, they are gravity defying, and when negative they are down almost beyond redemption. Most hedge funds do not employ such a high level of gearing. "

So in today's market if you want the maximum risk exposure for a hedge fund investment�you need to invest in an event driven highly geared minimum 100-1 (exposure vs. capital base) fund that invests in the global market sector by selling short with a minimum compounded annual return of at least 30%.

And, Oh yeah, by the way�a hedge fund that has its risk insured by the Federal Reserve.

If not, then just buy some physical Gold and you'll sleep better at night just in case that Fed guarantee thing doesn't work out.

"Financial Accounting Standard 133, known as FAS 133, was established by the Financial Accounting Standards Board (FASB), an authoritative developer of standards for financial accounting and reporting in the United States. This new standard requires all organizations that use derivatives and report financial information under U.S. Generally Accepted Accounting Principles (GAAP) to record on balance sheets the fair market value of all derivatives, along with all changes in market value reported as profits or losses on income statements.

Throughout the United States, banks, investment and auditing firms, and corporate treasuries are facing compliance challenges with FAS 133, a new accounting rule affecting the record-keeping and reporting of financial derivatives. FAS 133 compliance can be stringent and exacting on financial organizations, causing some even to reduce or cease their derivatives activities. Eventually, however, thousands of firms and companies that understand the benefits of derivatives will have to not only apply these new requirements organization-wide, but have the requisite tools in place to service their clients, as well.

Because of the daunting task of industry-wide FAS 133 compliance, many firms and corporations have opted to curtail or even eliminate entirely their derivatives underwriting and trading activity for the short term. This approach, however, carries its own set of risks.

Firms that decide to stop using derivatives because they are not prepared to comply with FAS 133 could lose strategic advantages that typically result from prudent risk management. Among the impacts of not using derivatives to hedge positions could be a higher cost of funds, a lower price at which commodities are sold, or more difficulty competing in foreign markets. For U.S. companies, earnings volatility will likely increase and relative competitive strength decrease for enterprises that stop using derivatives because of FAS 133.

This will require organizations that use derivatives to mark to market historically all derivatives positions as of financial reporting dates. It also will require organizations to perform prospective hedge effectiveness tests for derivatives on their books and, throughout the life of each derivative instrument, retrospective hedge effectiveness tests as well.

FAS 133 compliance is enormous in its size and scope, and many companies do not have the necessary combination of derivatives subject-matter expertise, access to historical market data and the time to devote to managing all of the complexities required in building internal compliance systems to engage in automated accounting and reporting of this magnitude. Companies need systems that are secure, open, can scale from one user to an entire enterprise, and that offer permissioned access points for members of a sell-side or auditing firm to provide information for clients about the derivatives that they are using.

Auditors providing auditing services to any business that uses derivatives will require business systems to enable staff to verify client compliance with FAS 133. Failure to do so could expose the firm and partners to unnecessary professional business risks.

Investors may experience earnings volatility in the short term, but over time FAS 133 compliance will result in much higher quality risk disclosure. This, most professional users of derivatives agree, will help create a stronger financial system over the long term.

Banks also can benefit from accurate, independent and comprehensive financial instrument valuation and risk management solutions that FAS 133-compliant software can provide. This may include mark-to-market and hedge effectiveness testing for interest rate swaps on their books, or to deal with commercial loans that are pooled and hedged with basis swaps.

As daunting as FAS 133 compliance may be, successful financial organizations realize that readiness is ultimately not an option. Thousands of firms, corporations, banks and auditing businesses that understand the benefits of derivatives will eventually need to implement a technology solution that is comprehensive and highly integrated to help them successfully leverage their assets now and into the future. "

BR-So it is becoming even more complicated to invest in derivatives because of these new accounting rules now in effect. The secretive manipulations will now become IRS recoards and reports that are causing some firms to limit their derivative exposure. This exposure to risks is really what drives the hedge fund industry. The transfer or elimination of risk is what derivatives are all about.

Reporting dates and mark to market transactions must now be reported and so this is not an easy task (to comply with the standards of FAS 133). These new rules not only apply to the banksters, but also to hedge funds and any other entity who invests in derivatives including the clients of the above.

From my previous post on this subject: ""Fifteen per cent said they had reduced use of financial derivatives due to the US financial accounting standard 133 (FAS 133) and international accounting standard 39 (IAS 39). Among US companies reporting reduced derivatives activity, several said they were dropping their use of complex options in favour of plain vanilla hedging tools, such as currency forwards, that more easily qualify for FAS 133 hedge accounting treatment."

Plain vanilla hedging tools? Since most of these hedge funds are "off-shore", I wonder which accounting standard applies to which entity�FAS 133 or IAS 39? And what happens to individual investors if their hedge fund does not comply with these new standards or meets its obligations or defaults? The Citibanks and JPMC's of the world are covered but are you?

95 million barrels of proven and probable oil reserves in a country the size of Texas is not much ....about the same reserves as many E&P companies. A little more natural gas but nothing to get excited about considering that gas is in much greater abundance throughout the region and harder to transport. As for coal, the problem is not limited supply. Nothing is said about gold!

I can remember when the left said the U.S. was in Viet Nam for the oil and oil companies. It's been 30 years and nothing is gushing yet. Not that those capitalists aren't greedy. Maybe not much oil?

The simplest explantion is usually the right one (Ocam's Razer). If the U.S. was just after the resources she would take Iraq and just forget about Afghanistan.

The Associated Press
About two weeks ago, a security team spotted scorch marks on a basement doorway below 4 World Trade Center, on the east side of the ruined complex, according to officials.

Even in a place of mass devastation and death, those scorch marks got fast attention. They had not been noticed by a patrol team a few hours earlier, and behind the damaged � but intact � door were nearly a thousand tons of gold and silver. To security officials, it looked as if someone had tried to break in.

Within hours, a video surveillance system was installed to keep at least an electronic eye on the precious metals until their custodian, the Bank of Nova Scotia, had a chance to remove them. That work began this week.

A team of 30 firefighters and police officers are helping to move the metals, a task that can be measured practically down to the flake but that has been rounded off at 379,036 ounces of gold and 29,942,619 ounces of silver.

As layers of debris are peeled away, recovery workers are opening gangways to intact portions of a 16- acre basement that was largely unseen but was a place of spectacular scope in its own right. Just the basement area of the World Trade Center enclosed twice as much space as the entire Empire State Building.

Nearly a quarter of a mile below the spectacular vistas from the towers was their upside-down attic dropping 70 feet below the ground, a strange world with enough room for fortunes in gold and silver, for Godiva chocolates, assault weapons, old furniture, bricks of cocaine, phony taxicabs and Central Intelligence Agency files. With so many people still lost, the owners of this stuff have maintained a discreet silence during the recovery operations. But that doesn't mean they're not interested.

Beneath the Customs House � 6 World Trade Center � was an armada of government vehicles, including dozens owned by the Secret Service, in a fenced-off area. Within that area was a garage where a single armored limousine was parked under the tightest security.

The limousine was so long that it needed straight-line access to the street, because it could not clear tight corners in the basement.

That car had been used to carry heads of state visiting the city, said Tony Ball, a spokesman for the Secret Service. (The president's limousines are stored in Washington and flown everywhere he visits.)

In the 1993 trade center bombing, an armored Secret Service limousine was parked about 100 feet from a truck bomb. Although the bomb crashed through five stories of concrete and the concussion destroyed cars all over that floor, the Secret Service limousine "did not even have a broken windshield," according to a government official on the scene that day. The condition of the limousine after September's attack was not known yesterday. "We haven't gotten anything back yet," Mr. Ball said.

Asked about reports that his agency also kept what looked like ordinary taxis and telephone company trucks in the basement, Mr. Ball laughed. "What I would say is that it is not unusual for law enforcement agencies to have these kinds of things," he said.

Besides the Secret Service, the building named for the United States Customs Service also housed an office of the C.I.A.

That building is now partly collapsed, with a rubble pit 30 feet deep. Somewhere in there are drugs, weapons and contraband seized by the Customs Service at the region's airports. The Bureau of Alcohol, Tobacco and Firearms also lost two evidence vaults, according to a spokesman for that agency, Joseph Green. They have not yet been recovered.

"There could be several hundred weapons � somewhere between 200 and 400, ranging from small-caliber semiautomatic pistols to assault rifles," Mr. Green said, adding that a few of the guns had been found. Agents plan to be on the scene when the remains of the building are demolished sometime in the next two weeks, he said.

"After that, we'll be working at the landfill to search for any important items that are still missing."

For people who have seen the surface destruction, either in pictures or in person, it may be hard to imagine that anything is intact below ground. But engineers and recovery officials say that large parts of the underground perimeter are undamaged, even though the buildings above them are partly collapsed.

One area is below 4 World Trade Center, where more than two decades ago, Swiss Bank built a huge vault and storage area. The vault was reached from the Swiss Bank offices by a private elevator.

To reach the vaults, armored trucks would drive through what had once been the tunnels for the Hudson and Manhattan railroad, the predecessor of the PATH system. These tunnels had run as far east as Church Street, but were not needed when the trade center was built and the PATH terminal was set closer to the river.

The western stubs of the original tunnels, ringed with cast iron, were converted into roadways. These roads ran directly to a roll-down door in front of the Swiss Bank vault area. Inside was a loading dock.

By the time of the 1993 bombing, Swiss Bank no longer was using the vault, and shortly afterward, the bank relocated its remaining operations.

The next tenant of the vault space was the Bank of Nova Scotia, which estimated the value of the metals at $200 million.

"We are in the process of relocating the contents of our vault at World Trade Center building No. 4 to another secure location, because authorities need to demolish the building," Pam Agnew, a spokeswoman for the bank, said yesterday by phone from Toronto.

Some of the metal is owned by the bank, and some by its customers, she said. She declined to say where the metals were being taken.

"The contents remain safe and intact," Ms. Agnew said. "The contents are fully insured. We're working very closely with local authorities to ensure a safe and secure relocation effort.

"The removal of the contents was not a priority for us because we've always known it was safe and secure," Ms. Agnew said.

Asked about what appeared to be an attempted break-in two weeks ago, Ms. Agnew said that she was unaware of it. Later, she called to reiterate that the metals were safe: "It would be factually incorrect to say there had been any attempt to steal the contents of our vault."

However, a government official involved in the recovery efforts said that there had clearly been an attempt within the last two weeks to enter the vault area. "It looked like they used a blowtorch, a crowbar," said the official, who spoke on the condition that neither his name nor his position be identified. "The Port Authority police began periodic patrols, and then a closed-circuit television system was put in."

The bank also engaged Kroll Inc., a security business based in New York, to supervise the relocation of the gold and silver, a process that began this week, The Daily News reported yesterday.

Michael Cherkasky, the president of Kroll, declined to comment on his company's involvement.

Anyone trying to make off with the gold would not be able to run very fast: each ingot weighs 70 pounds.

Meanwhile worsening strains develop between Canberra and Jakarta, home of a major portion of the worlds muslims
Ms Megawati warned that world Muslim opinion would be inflamed if the bombing continued during the Islamic fasting month of Ramadan, which begins in a fortnight.

I truly believe there will soon be a degree course on 'spin doctoring'. It seems to be an accepted ministerial appointment within government these days.

One, who overstepped his mark,on three occasions to the point of being caught out in his lies and deceit, yet was acknowledged as an expert in his field, Peter Mandelson, (Blair's right hand man) had (after much squirming) to relinquish his post.

I suppose the objective these days is put out as many lies and conflicting reports as you can - this confuses, confounds, diverts energy, and people waste time arguing over which may be right until it all becomes one big yawn.

Trouble is, they tell such convincing lies, they even begin to believe them themselves.

Thanks for the earlier post. Some nuggets buried in the link you posted earlier about Andy Smith (a gold bear turning around):

"The price of gold could go to $340 an ounce within the next three months - and continue to soar after that.

This not any old forecast by a "gold bug", those gold enthusiasts, but a complete about-face by one of the staunchest pessimists on gold prices in the business.

Andy Smith is the precious metals analyst at Mitsui Securities in London.

There are many in the gold market who argue that only reason the gold price has not risen farther is because central banks and some of the big investment banks are deliberately suppressing it by selling gold as soon as the price spikes."

Just how large are those Brinks trucks that are hauling all of those PM's out of the rubble of WTC? Is it all there to transport? We'll never know.

Washington, Nov. 1 (Bloomberg) -- The International Monetary Fund ruled out any
additional financing for Argentina unless the government forces provinces to
accept a cut in federal payments.

The benchmark floating rate bond plunged more than 12 percent to its lowest
level in six years as provincial governors indicated an agreement is unlikely,
increasing the prospect of a default on some of the nation's $132 billion of public
debt.

``We recognize the difficult political situation down there and the difficult political
discussions between the central government and the provinces in particular,'' IMF
spokesman Thomas Dawson said. ``Resolution of that is naturally a requirement
for going ahead with the program.''

Overnight interest rates in pesos more than tripled to as high as 190 percent as
domestic banks braced for a wave of withdrawals. Deposits fell by 11 percent, or
$9.1 billion, since the end of June. Pesos for December delivery fell to 1.055
pesos per dollar from 1.03 pesos, signaling waning confidence in the ability of
Argentina to maintain its one-to-one peg with the U.S. dollar.

The floating rate bond due 2005 fell 6.5 to an offer price of 49, the lowest level
since March 1995. That pushed the yield up to 54 percent, triple the yield of
June. Rating agencies say Argentina will be in default if it forces investors to
swap debt for new securities that have lower value.

``No news except a comprehensive restructuring would be able to change the
dynamics in Argentina,'' said Bruno Boccara, Standard & Poor's analyst for
Argentina.

President Fernando de la Rua will announce at 8 p.m. (6 p.m. in New York) in a
videotaped address to top business executives that he has ordered a
restructuring of Argentina's $95 billion of outstanding bonds, a person familiar
with the announcement said. Economy Minister Domingo Cavallo will speak to
the executives after de la Rua's statement, the person said.

Negotiations

The government, in talks with provincial governors for 17 days, wants to reduce
the $1.4 billion it transfers to provinces each month in tax revenue. In exchange,
it promised to help cut the provinces' debt burden by requiring domestic banks
and pension funds swap at least $14 billion of provincial bonds and loans for new
securities.

The government and provinces are ``very far away'' from an agreement, said
Carlos Ruckauf, the governor of the Buenos Aires province.

Dawson suggested that Argentina may have trouble obtaining a $1.2 billion loan
payment from a $22 billion package, which was expected by the end of the year,
unless the government fulfills its pledges to the fund. The government had hoped
to speed up that payment, analysts said.

The government has counted on IMF loans to make a proposed debt exchange
more attractive to investors. The government has selected Merrill Lynch & Co. to
help advise on lowering financing costs on $95 billion of outstanding bonds
through a similar exchange. Merrill International President Jacob Frenkel arrived
in Buenos Aires today to meet with government officials.

The government has said the new securities would pay lower interest but be
guaranteed by IMF and other international loans.

$3 Billion

If the government can't meet its commitments to the IMF, Argentina won't receive
a $3 billion payment intended to be used in the planned debt exchange, Dawson
said.

In addition, he said, an acceleration of funds ``is not being considered. It is not in
the cards.''

U.S. Treasury Secretary Paul O'Neill has indicated that any more assistance for
Argentina should come from the IMF and not the U.S., which is the fund's largest
shareholder.

The IMF still hasn't scheduled a visit by an IMF team to Argentina, which would
have to finish its work before the lender can release the next payment from the
credit line.

``We would expect a fund mission would go down once the authorities have
concluded their considerations,'' Dawson said. ``That could be in the near future
and would be expected to happen once sufficient progress has been made on the
fiscal side.''

Payment Made

Argentina made payments on $117 million bonds due today and faces another
$1.18 billion in debt payments in November, including loans from international
lenders. The Buenos Aires province, the nation's most populous, has $47.3
million in payments to bondholders this month.

The IMF's decision to withhold loans to Argentina will make those payments
more difficult, analysts said.

``Given that the IMF has stated it is not considering advancing the December
disbursement into November, the November amoritizations will have to be met
primarily with new cash from the pension funds,'' said Christian Stracke, Latin
American debt strategist for Commerzbank AG. ``It may also make any cash
payment of debt to the provinces difficult if the central government must conserve
cash reserves to cover amoritizations.''

"...One immediate impact may be the forced reclassification of reserves by all American listed producers for the coming year-end. That could have a significant, even ruinous, effect on local mines and listings. While most analysts consulted were adamant that their valuation models would not be affected, there will be problems for retail investors who don't always have access to elaborate formulas..."

snip

"...Junior miners will be worst affected. A good deal of their value is translated through the power to define reserves. If they can only be rewarded once a feasibility study has been completed, then they will be far less inclined to take risks. It will also be more difficult to secure financing even if they are running "under-the-table" numbers.

What makes North American explorers great � and terrible � will be squashed.

The desire to conserve expensed exploration without a guaranteed return will spread across the whole industry (accelerating reserve depletion in the current environment), but juniors will be passing on projects far sooner than they might otherwise do.

A Toronto analyst agrees that the SEC is going to force a change in behaviour that favours senior producers who can fund development internally. "We won't be seeing too many more Kinrosses," he said. "The likelihood of picking a ten-bagger will be even more remote than it is now...."
*************************************************
Now why is the SEC twisting nuts in this industry while turning a blind eye in all others? One more way to ruin public interest in gold stocks?

"As divined by The Economist on September 15th, the overwhelming majority of companies have chosen to include the phrase "due to the events of September 11th" in their quarterly reports to explain away their corporate shrinking profits or growing losses."

In My Humble Opinion....Saudi Arabia is at risk, the Kingdom is corrupt and ready for a Coup. Royal family sending money out of the country.Income per capita declines from over $20,000 to just over $7000 ,the result of pilfering by the "Royal" Family.Over 6000 princes have a standard of living to accomadate.Its good to be a "Prince".Israel sees the risk and prepares for peace.
No need to stir up trouble to keep the U.S.involved.
The U.S. prepares for new oil supplier .The Russians will provide military manpower and sell Caspian oil to the U.S.instead of Saudi.Russia revives its economy and gets what it always wanted ,Eastern oil.The U.S. will buy oil from the Russians.
Isn't it curious that prospects for peace occur when Saudi
is taken out of the picture.Seems to me trouble makers in the mid east had a motive to keep the U.S engaged to protect Israel and U.S. oil interests .Take away Saudi Arabia and no more reason to make trouble.The U.S. interest in Mid East will decline and bring on better Arab relations.Trouble maker Sharon must make peace,without U.S.economic interest at risk Israel must go it alone.His problem is Arafat is the only non-radical he can talk to ,but he hasn't demonstrated any willingness or power to enforce any peace agreement.
The times they are a changin

All value is found in the consumer's use for an item. Without Western automobiles, chemical plants, and most of all the knowledge of how to build them and what to make in them, the oil is a useless sticky poison.

It is possible to produce wealth from it, but oil becomes wealth only when it is needed in order to move a car or derive nylon. The latter is only worth something because of the shirt that can be made of it.

The oil does not have an intrinsic value. It is not desired for its own sake.

It is replaceable with many synthetic and naturally occuring substitutes and this caps its ultimate long term relative price as measured in consumer goods. By raising prices above the long term values OPEC simply lost market share and drove the oil producing countries into near bankruptcy after they had invested heavily in increasing production. Indonesia went in hock to a level of 7 times the export value of its oil production every time oil prices rose. This was a major contributor to the country's dire straits in the Asian economic "flu" (at the bottom of the contraction Indonesia had lost 1/6 th of its economic activity, and has yet to recover half way after 4 years). Saudi itself, lost market share from nearly 1/3 of world output at the peak prior to the "embargo" to 4% at the bottom of the glut of 1985-6.
They drove the world's oil producers into a colossal debt trap of unprecedented proportions and caused a massive speculative accumulation of 5-6 billion barrel equivalents funded by some $200 billion of global debt (about 1/2 trillion in today's dollars). As this most massive of non-war hoarding experiences in history was brought about, we got the most crowded trade ever, and its unwinding did not end till 1995.

Why all this? Because of the mystical belief, shared by FOA, of oil having an intrinsic "wealth" value somehow not recognized by the markets on a normal functioning basis. As if people did not trade real goods and services with each other THROUGH the financial system rather than trading with it, exchanging current real wealth for FUTURE real wealth THROUGH the system, not only exchanging current goods for other current goods. The latter is only possible in a zero or negative sum society such as Saudi where economic investment is impossible because of political interference and social uncertainty.

Max Rabbitz: Why do ask about Gold in Afghanistan? Gold is 'small potatoes' in the great scheme of things. The total capitalisation of all the world's gold mines is only about $35billion. The market is well and truly cornered as most of it is owned or controlled by TPTB. (or hadn't you noticed?)

Sitting somewhere in those mountains of Northern Afghanistan is a store of drugs with a street value of around $25 billion. Do you think some raggy-arsed down trodden Afghan 'owns' and controls that little lot. Where do you think lies the greatest profit - gold, or drugs? It isn't gold peddlers that are being shot down in police shoot outs and gang wars in the streets of the US.

As for Iraq and oil, what do you think the US establishment is doing? Is Iraq free to do what it wants with its oil, or anything else for that matter? Where do you think the next move is after Afghanistan?

I use 'establishment' for the reason that from where I sit the US 'elected' government
is little more than a puppet regime. Sad but true - and Britain is no better.

You don't think so? Then pray tell me how a small Middle East country of about six million - small by any standards, can stick its finger up to its benefactor and 'friend', supposedly the world's greatest military power, and which gives it over $4billion a year of its tax paying citizens hard earned money, when it is asked to comply with one simple request - the first ever made over the many years it has been receiving the hand outs, and gets away with it?

Other larger countries have been pummelled into the earth, or strangled by sanctions for far less. Yet the American people have to see their 'elected' government take the snub, and the finger, without even stopping one dollar of the handout.

One day the American people, hopefully, will wake up and find who its 'friends' really are.

Back to gold. Gold will move when it is in the interests of TPTB for it to do so. I have mentioned when that is likely to be on more than one occasion, and on that I don't waver.

Is this a good time to buy? If one has the funds,the nerve, and not addicted to only fishing on the very bottom, it is as good as any to be acquiring on dips.

The attack on the Liberty was done on the 4th day of the 6 day war of 67. The ship did electronic mapping of radio signals by radio triangulation, which allowed analysts (in a Cyprus intel station) to create maps of Israeli troop positions which were automatically sent to Nasser via radio and cable, both of which were monitored by Israel (the Egyptian codes were broken). The order to transfer the intel came from Johnson himself at the behest of Oil company reps within both CIA and State.

As anyone who was at the UN Security Council meetings during the war knows, the Egyptian delegation was unwilling to sign a cease fire till the 8th of June when the info compiled from the USS Liberty's surveillance was stopped. A couple of hours after the ship was incapacitated, the flow of info stopped, resulting in Egypt's UN ambassador El-Kony crying in the chamber and no longer insisting on complete Israeli withdrawal as precondition for a cease fire.

That is the significance of the attack on the USS Liberty.

The people on the boat did not have a clue to what purpose their intel was being put.

The stories of the POW "war crimes" were much exagerated but had some truth to them. I think (I definitely do not know for certain) that the POWs involved were an Egyptian field command found with precise maps of Israeli troop positions and routes they took to travel between them. The Egyptians would not have been killed because the info they could provide as to where the maps came from was far too valuable, a completely crucial existential problem for Israel.

A few sources to read are:

A. and L. Cockburn, "Dangerous Liason", Harper Collins 1991
W. C. Eveland "Ropes of Sand", Norton 1980
Anything written by John Loftus
Moshe Dayan and a few others leaked a long stream of bits and pieces out to the Israeli press as to why they ordered the attack.
You may be able to find some of the cronies of the people involved on the US side, like Kermit Roosevelt, or what's his name Copeland. They all were reputed to leak like a sieve.

Uponroof Thank you for your kind words. I did what you asked, I went back and read the post of goldfan. As a psychologist myself I could discuss at some length the conditions of sanity, and insanity. However, this is not the place to do it, as you will appreciate.

As for the question you ask about me naming any incidents in which either the US or Britain has been responsible for wholesale unnecessary slaughter of 'innocents', surely you are not serious?

I know you mean well, and because it is so abhorrent to you it is something perhaps you shut out of your mind when these events, and there have been many, are perpetrated by your own country.

Rather than me start listing them, just stop and reflect, you don't have to go reaching back into musty old history books.

The gold reference was to show how it wasn't even considered in the valuation of Afghanistan's resources��at least not in public. It is as you say "small potatoes." I think I understand the game being played. Gold is the enemy of the banking system and must be controlled as paper profits are gained. It is because I have such little faith in the sustainability of this system that I am interested in gold. Owning physical gold seems the best way to protect yourself during these coming "interesting times."

Drugs..... Gang wars and shoot outs are related to the illegal nature of the drug trade not the relative value to gold. I think the war on drugs is misplaced. I tend towards Libertarian and would allow my fellow citizens to risk their health and happiness if they so chose, but also suffer the consequences. Money would be better spent on education and treatment. A right of employers to know the drug habits of their employees should be considered. The current system profits only sociopaths and the forces of chaos.

What do I think the U.S. establishment is doing with Iraq? Messing up. I thought Iraq was supposed to allow inspections? They lost the war and agreed to it.

I heard that the number one rule in the Middle East is to never wound your enemy and let him live��he must be killed or he will come back after you. It would have been better for the Iraqi people. But then I have little hope this region will be able to emerge from the dangerous delusions of that 7th century cult.

Israel is located in an unfortunate neighborhood and it is up to them to fight or die. However, it is far from true that Israel "when it is asked to comply with one simple request - the first ever made� can stick its finger up to its benefactor�.and get away with it." Many requests have been made to give back territory (Sinai and West Bank) and much was offered. Israeli tanks stopped at the Suez canal when they could have had Cairo. Restraint was asked after each attack on civilians at bus stops, caf�'s, dance clubs ......

The U.S. is blamed by Arabs for not being even-handed when what they really want is for the U.S. to get rid of Israel for them. I don't see a way out. There will be war. It is the "will of Allah." Get some more gold.

All nations and empires want assured access to natural resources. The U.S. offers to pay for them at the world market price and allows all other countries to purchase at the same price. It is not the only option.

I really don't like to spend my time on Israeli policies but I will put this forward so that you should understand.

Arrafat and the leadership of his collection of political and terrorist organizations are practicing the same double-speak they have always practiced. They speak of peace to Americans, while operating terror attacks with their hands. While they demand Israelis come to negotiate, they are completely unwilling to change positions. Meaning that "negotiations" are the unilateral disarmament of Israeli positions - Israelis give under US pressure, and Arrafat demands more.

Though I can't say that Sharon's occupation of West Bank cities has much to commend it in either results or costs (political and human), it is still an attempt to do in the Palestinian Authority's areas exactly what the US is doing in Afghanistan, but at a much lower level of intensity. Unlike the US trying to depose the Taliban, Israel is not trying to take down Arrafat despite his giving succor to terrorists, some of which are part of his organization - like the PFLP that assasinated the Israeli minister. Arrafat's message in this action was that those who do not acquiesce to his demands on the Israeli negotiating team will be killed.

Israel's significance to the US:

Israel is the only friendly port in the Middle East where the government and the people both broadly support the US. It is also America's local arsenal of last resort. This was a critical role during the cold war, and is just as critical today because of the rickety footings of Gulf oil despots who can lose control in a matter of days.

Israel is the only democracy in the area with an actual civilian rule. It is also one of the few broadly secular countries in the region.

Israel has a very advanced military technology that successfully competes with the US. Better it be on our side than someone elses.

The other significant point is that Israel at the end of its rope means nuclear war and the end of oil production in the gulf as we know it.

Finally, the question should be reversed:
"Why is a group of dictatorships given so much American support against their own people, and against America's own natural ally?"
"Why is that bunch of despots who fund and operate terrorist campaigns against the US getting American support in pressuring Israel?"
"If they are such "friends" why are the Saudis making demands and putting preconditions for not opposing the US in its self defense? Why are they unwilling to help? Why is the US coddling them in spite of their displayed malevolent intentions towards both the US and Israel?"

The answer is obvious: "they sit on a sea of oil".

Why do we care about that?

Because it is the cheapest oil to extract, and thus the companies that extract it will have the most steady and risk free profit margins available in any business. It is no coincidence that Exxon has the greatest consistent profit margin of any company on earth. It is these people who profit from exclusive access to Saudi oil that send representatives to populate this and prior government administrations and the bulk of the career positions at the State Department and in the intelligence community.

Because of these steady and fat profits, it is important for bankers to retain these customers and assist them politically and financially.

In order to retain both access and exclusivity, the "friendship" of the controllers of the oil is so important, as is the need to keep these particular "friends" in power. When they stab you in your back you just silently take out the knife and ask them whom you should stab with it.

The SEC is once again attacking useful information in favor of rigid fictional accounting standards. A little more of this and GAAP will simply be the second book that nobody looks at but for accounting sticklers and automated computer screeners.

Because the SEC defines the "official" version of reported information, making the books not reflect industry realities fools the trusting souls of the small investors, now less likely to invest in companies trying to fund a feasability study because the exploration expenditure is not balanced with an estimate of the value of what was found till all risk in the valuation estimate is gone. Thus giving the advantage back to larger companies and sophisticated analysts who can pick up highly attractive unproven reserves that are going to be booked as "0" because of the SEC.

The best thing for the investor, both big and small, is for the SEC to be shuttered before it manages to destroy the US markets entirely.

http://cns.miis.edu/research/wmdme/map.htmTo further illustrate some of what ORO said in #64515 (quite a reasonable analysis), click on some of the regional players in the link map, you'll see the small land mass concerned comes with a sting in the tail.
In "The Art Of War" you learn the weak are picked off, but strength and the ability/will to use that strength when really necessary are a deterrent.

I feel like we're in some forgotten unit, cut off at the Russian Front in the dead of winter, burrowed into foxholes, with nothing but our (Internet) radios and a few golden bullets apiece. (Will our oft-frozen weapons still work under attack?) Will Spring come before we've all frozen to death?

It's a tough life, but consider the alternative. (Unarmed and unknowing peasants in some village, plowed under by a surprise armored attack...)

(Link is to "The Forgotten Soldier", by Guy Sajer, a great, great account by a Frenchman in the German army -- hope I still have my paperback from 1972, 'cause it looks expensive on Amazon.)

Why would the allies wish to waste a bomb on a non-military target? These weapons are very expensive. uponroof has it right. There is no such thing of the bombing of innocents going on. Sometimes these murdering terrorist cowards hide under their women's skirts and in religious buildings but I know of no instance where the Allies bombed them there on purpose, do you?

There is collateral damage that sometimes results from misguided laser bombs, but there is no policy now and there has never been a policy by the U.S. or the Allies as to the purposeful destruction of "innocents". If I am wrong and there is such a policy, please identify it to me (from a credible source, of course, not some flake that posts on the Internet).

Terrorists don't need to be captured, they don't need a fair trial, they have no US or UK styled "rights", they don't need to sign a peace treaty, they don't need their motives to be understood, they need to die.

The term the "slaughter of innocents" is offensive to me. Especially since the bodies have not all been identified at the WTC. The term has more to do with the excuse of not doing anything vs. the Allies using any means at their disposal to destroy these murderers and their supporters. So please provide me a link. I hate dusty books because they have nothing to do with the first war of the 21st Century.

Sources in Hong Kong's banking sector said the exchange would initially be set up in Shanghai, together with a foreign currency exchange system. It is to be launched by Nov. 28. However, the report said that some believe the November launch will simply serve as a test of the system, with the formal launch set for January.

. . . according to estimates from the World Gold Council, China's demand for gold will be approximately 210 tons this year.
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They called their bluff:
Meanwhile back in The White House, the US has announced that air strikes on Afghanistan will not be suspended during the Muslim holy month of Ramadan, ending weeks of speculation. Several Islamic leaders have voiced fears that a continuation of the raids during Ramadan - a month long period of fasting for Muslims around the world - could cause major unrest in their countries.

But US National Security Advisor Condoleezza Rice told a press briefing in Washington the US "could not afford" a pause in its campaign and that the bombings would continue . . . "
http://news.bbc.co.uk/hi/english/world/south_asia/newsid_1633000/1633140.stm

PS, I meant to add this quote of Condoleezza's from the BBC site to the previous post (64520):

"We do not believe that al-Qaeda or the Taleban are likely to be ones who are going to be observant of any kind of rules of civilisation"
Condoleezza Rice
US National Security Advisor
(Kind of say's it all - Netking)

- and so do i. In view of recession- depression economic news the markets rally as if there's no tomorrow - as all eyes are glued to the day after the tsunami, when the sun shines again. As it sure will, albeit on a fundamentally changed scenario.
The abundancy of reserve $'s ends at the redundancy of the reserve currency. A phenomenon, which comes with overuse - rendering the ongoing "abuse" as obsolete.

HS never has been as outspoken on manipulation before - here's a snippet , which you can read full lenght at the cafe:

"Eg, the US govt is on a course of massive manipulations, the most blatant in democratic history. Its blatancy helps to mask it, prevents the innocent (dim?) public from realizing they no longer have free mkts. Eg, on Oct 26, US mkts rose in the face of devastating bad news, economic & terrorwise. But US govt set up (after the 1987 crash) The Working Group on Financial Mkts (also known as the Plunge Protection Team) to secretly intervene in stock mkts whenever mkts start tanking, or are likely to in the face of horrible news. Thus, on Oct 26, as they do often of late, the US govt covertly bought S&P futures contracts, pushed the mkt up."

As far as i can see, the Bush admin didn't find a way out of the economic (amongst other) traps and will have to prolong this charade until it meets its destiny of reality.

... mesmerized by the spectacle of clearly visible fraudulent interventions by governement and their international crony agencies, i'm a wee bit reluctant to play any game and just hold on to my gold.
- manipulated too - cb2

"The best thing for the investor, both big and small, is for the SEC to be shuttered before it manages to destroy the US markets entirely."
***********************

Amen ORO. It appears this change is designed to increase the influence of majors and reduce the volatility potential of juniors. A clever way to discourage 'exubberance' in this sector.

Nothing new.

Ever since the 'ignorant' American middle class entered the stock market en mass we have been forced to watch this second rate con game which continues now without end. The Stock Market is the American economy, the American economy is the safeguard of the global standard. Nothing is sacred given these stakes.

This gold mining bookeeping adjustment is just another instance of manipulative intervention designed to implement the 'greater good for the ignorant majority'. Mr Pitts, et al, should be cannonized for their services to the great unwashed.

I believe I can safely say that intervention today, under Bush, has surpassed that of the Clinton regime, much as I hate to admit it. GW's excuses include an inherited 'strong dollar' mess, Greenspan sans exubberance, the inevitable recession, and now terrorism. Most were issues he knew were coming but failed to tackle. Bush has showed his colors as a follower not a leader in his weak denial approach. The ability to affect public opinion, and implement change escapes him. He is a 2nd class reactionary manager who consults with those around him too much. Far from proactive.

Pathetic as it is, I am surprised this critically flawed policy of intervention, in all markets, suspends on without reckoning.

On the one hand I am encouraged knowing, as Richard Russell states: "Markets always do what they're supposed to do but not necessarily when we expect it." On the other hand we are witnessing intervention as never before, effortlessly changing the ultimate conclusion Mr Russell claims sacred.

Yes, a bad ending seems inevitable. But the date is ever moving forward, defying time and ever surprising those which hopefully understand, and continue to cling to the truth. Thanks for your thoughts.
********************************************************
Pandagold-Thanks for getting back on this. I would, regardless of your concern, appreciate instances of innocents being slaughtered intentionally by Americans or British in this conflict. Please list those instances similar to that of the Taliban's indiscriminate and intentional executions of civilians (both foreign and domestic if possible). Thanks.

"Mkt Manipulation is a cancer. It eats away at the body politic & body societal, sanctifying lies & violations. Command economies are what the Soviet Union & all socialist, communist nations did/do & we in the West rightly condemned. As Bill Murphy of GATA says: "why did we bother to defeat communism, if we now practice it?" The US is an increasingly less free economy, moving fast toward a Command Economy, with govt intervening around the clock. It has been going on, increasingly, for years. It's now extreme. Has it reached the point of no return? Too late to return? Think about it."

"What can U do? Speak out for some of the principles we've articulated in Our Mission. Be a contrary investor. If the US$ & US stk mkts are being rigged, watch for chart indications when/if the fix loses its momentum. Windows of opportunity. Be more flexible than before. When the fixers are on a roll, bet with the house, or step aside, or, make your portfolio a homemade hedge fund. Or buy into one of the hedge funds of the kind we like. But watch for the changes. Ditto re gold, in reverse. Speak out against mkt fixing, but also invest with the fix in view. Take profits often before the fixers snatch them away from U. Even in gold; then buy back on dips. I do. Use stops. Outsmart the manipulators by following their slimy money trail."

"One blessing of the Internet is it "publishes" news & views the mass media isn't allowed to print/tell. Some of the views are cranky & kooky but many are revealing & probing. U have to decide which is which. But tis better YOU act as editor & censor, not the mass media deciding what they'll let U see/read. Let's hope govts don't impose political censorship on the Net as they already do on Net porn. Don't count it out! They could claim "it's not in the national interest in wartime" in any nation. It's happened with the press a hundred times. (This is part of a series on Freedom) (while still allowed)."END

Comment: I needed that encouragement from HSL, time to start speaking out! Thanks for getting me started, cb2.
This post is also an endorsement of GATA and LeMetropole Cafe from which it came. Talk about speaking out! Has anyone else noticed how the 'reality' that GATA now sees and openly comments on, has much less 'rose color' than what was seen a year or two ago? What a trail this all has become. The magnitude of the monster we face......

"The Constitution integrates market and state- by mandating silver and gold coin as the only official money. And the Constitution ******seperates bank and state****** - by prohibiting the govt both from emmitting paper currency itself, and from granting special legal privileges to private banks that emit such currency. Today, however, politicians and bankers have stood the Constitution on its head, incestuously coupling bank and state, and estranging market and state, by foisting off on America an irredeemable paper currency generated by a corporative-state banking cartel!"

"Usually, the most profitable form of monetary manipulation's what my opponents {Dominic speaking} call monetary policy, but I describe as **legalized counterfeiting****: the ability of politicians and their clients to obtain, under the pretenses of law, new supplies of money w/o investing significant amounts of physical resources or labor in the production of that money."

Comment: My emphasis ****** added above.
The Constitution mandates seperation of church and state? Actually the Constitution says that the state shall stay out of the church.
The Constitution seperates bank{!!!} and state!!! Seems like a tad of confusion abounds.

For FEMA--- This excerpt from this book is entirely FICTIONAL, this discussion is entirely theoretical, and in no way pertains to any form of current US reality.
For non-FEMA's-- Read the book!

An interesting Gold piece from Money Central. The key points being made that the USD(ALL of them!)have been holding gold back to an extent. Look out next year Dines is quoted on as the proverbial begins to hit the spinning blades in earnest first in Argentina, Brazil and affecting all of Latin America, including Mexico. . . then watch gold cook. Look for the moment as a late last chance to get your position, the sceptics will be surprised what gold will do next year. - Netking
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Snippets:
"Throughout much of history, gold has been a place of refuge from financial uncertainty. Many Germans treasured gold during the hyperinflation of the 1920s. During World War II, people fleeing the Nazis used gold coins to pay for help in their escapes. When inflation took off in the late 1970s in the United States, people rushed to buy gold, which soared to more than $850 an ounce in 1980. For many people, gold is portable, virtually indestructible and universal as a store of wealth so, now, with uncertainty raging, why hasn't gold taken off again?

The obvious answer (The big bad dollar-Netking): Unlike the 1970s, when inflation hit nearly 13%, the dollar remains the world's strongest and most sought-after currency in spite of economic slowdown, lower interest rates and even terrorist attacks. Even though the Federal Reserve has pumped billions of dollars in liquidity into the economy, starting last January, we haven't seen a whiff of inflation. One reason we haven't seen inflation this year is that much of that newly created money merely offset the trillions of dollars that melted away in the stock market decline of the past 18 months.

If you define inflation as a phenomenon of "too much money creation" or "too much money chasing too few goods," you're faced with this reality. The world is more awash in goods than in dollars and consumers who are badly shaken by terrorist attacks and anthrax scares. With little fear that the dollar may tumble badly, there's no reason to turn to gold as a safe haven.

*** Dines: Take advantage of the uptrend ***
Dines, who proclaimed himself "The Original Gold Bug" back in the 1960s, made his reputation as among the first to predict that gold would be freed its then government-fixed price of $35 an ounce and move substantially higher. Then, he predicted the price of gold and the Dow Jones Industrial Average would cross. They did. Gold soared to $850 in early 1980 as the Dow was tumbling down to nearly 750.

Dines sees a major recovery in gold prices during the next big currency crisis. He sees it erupting first in Argentina or Brazil some time next year and affecting all of Latin America, including Mexico. He expects that the response to a currency problem will be similar to the 1997 flight to gold when Asian investors turned to the precious metal as their economies and markets collapsed around them. But Dines strongly favors gold shares instead of bullion, because gold shares pay dividends and tend to move ahead of the price of the metal itself.

What's holding the price of gold flat is the relative strength of the dollar itself, Dines says, and that precludes a major rise in gold in this country. But his newsletter shows charts of gold prices denominated in Canadian dollars, Australian dollars, South African Rands and Indian rupees. In all of those those currencies, gold clearly has been rising -- but so has the U.S. dollar. And you can earn interest, albeit low, on dollar deposits.

*** Ruff: Prepare for the worst ***
Howard Ruff became a regular on talk shows and in newspapers thanks to his 1977 best seller, "How to Prosper During the Coming Bad Years," which sold more than 3 million copies. Ruff's centerpiece advice was to buy gold at $125 an ounce, which was great advice because gold was about to take off. . . . he's willing to predict that "in the long run, gold bought at today's prices is going to be worth a lot of money at some time in the future." When pressed about how far away that future might be, he said, "Not tomorrow, or next week, but perhaps one, two or three years from now, it has the potential to be worth $2,000 an ounce."

It would appear that your justification for the Israeli sponsored murders of unarmed and defenseless US sailors (even in life rafts) is based on some unsubstantiated claim of aid to Israel's enemies. That is the very same reasoning that al Qaeda and the Taliban are using to justify the attacks on the World Trade Center and the Pentagon. It is the US taxpayer whose funds are transferred to the "enemy" from the US government. Therefore your reasoning appears to justify recent event as well. I find that rather bizarre.

The government of Israel has lied about the circumstances of the USS Liberty assault ever since, telling a story markedly different from that told by American survivors, even those involved in the intelligence gathering activities.. Congress has refused to question Israel's demonstrably false account, even though the State Department's own analysis finds the Israeli story to be untrue. Yet the most pressing question remaining from that infamy is not whether the attack was deliberate. That was settled long ago for most reasonable people. The question is why Israel risked its relationship with America by killing American seaman on the high seas.

As far as reports of POW executions, the following account by Israeli eyewitnesses is quite telling. According to eyewitness accounts by Israeli officers and journalists, the Israeli Army - the army that claims to hold itself to a higher moral standard than other armies - executed as many as 1,000 Arab prisoners during the 1967 war.

Historian Gabby Bron wrote in the Yediot Ahronot in Israel that he witnessed Israeli troops executing Egyptian prisoners on the morning of June 8, 1967, in the Sinai town of El Arish. Bron reported that he saw about 150 Egyptian POWs being held at the El Arish airport where they were sitting on the ground, densely crowded together with their hands held on the back of their necks. Every few minutes, Bron writes, Israeli soldiers would escort an Egyptian POW from the group to a hearing conducted by two men in Israeli army uniforms. Then the man would be taken away, given a spade, and forced to dig his own grave.

"I watched as (one) man dug a hole for about 15 minutes," Bron wrote. "Afterwards, the (Israeli military) policeman told him to throw the shovel away, and then one of them leveled an Uzi at him and shot two short bursts, each of three or four bullets." Bron says he witnessed about ten such executions, until the grave was filled. Then an Israeli Colonel threatened him with a revolver, forcing him to leave the area.

The Liberty attack was a war crime

The attack on USS Liberty was itself a war crime. US Navy Commander Walter Jacobsen, a Navy Legal Officer then doing graduate work at George Washington University, conducted an extensive legal analysis of the attack. His conclusion, reported in the Winter, 1986, Naval Law Review, was that several aspects of the attack violated provisions of the Geneva Conventions -- war crimes. Specifically, Commander Jacobsen found that the attack was not legally justified, that it constituted an act of aggression under the United Nations Charter, that the use of unmarked aircraft, the wanton destruction of life rafts in the water, the jamming of international radio distress frequencies, and the failure of the torpedo boat commanders to render immediate assistance to a disabled and helpless enemy were all violations of international law.

I guess if you are one of the "chosen people" there are no consequences for war crimes.

Sources:

"Attack on the USS Liberty: An edited version of SRH-256" is a compilation of several vital documents related from both sides of the controversy.

U.S. Navy, Office of the Judge Advocate General. Transcript of Navy Court of Inquiry into attack on the USS Liberty. 1967. Document includes more than 700 pages of testimony and supporting files. It is available to the public on request.

and many, many, many more references available.

BTW, Israel is not a democracy. They are allegedly a representative republic.

NEW YORK (Reuters) - U.S. consumer spending fell at its fastest pace in more than 14 years in September and the factory sector was pitched into its deepest slump since the 1990-91 recession in October as the economic shockwaves from the Sept. 11 attacks proved more damaging than feared. The Commerce Department said consumer spending sank 1.8 percent in September -- double economists' forecasts -- after a 0.3 percent gain in August. It was the first decline in the economy's most important prop in 2-1/2 years, and its steepest fall since Jan. 1987. Personal incomes were flat even though tax rebate checks continued to land in American mailboxes.

The National Association of Purchasing Management (NAPM) said its monthly gauge of factory activity plunged to 39.8 in October -- its lowest level since Feb. 1991 -- from 47.0 in September, and far worse than forecasts for a 44.3 reading. It's another nail in the coffin for the economy,'' said Oscar Gonzalez, economist at John Hancock Financial Services Inc. ``There is no silver lining. There is nothing to grab onto to suggest the economy is ready to climb out of a hole.'' A number under 50 signals contracting manufacturing activity; the NAPM index has held below that watershed since August
2000.

The day's numbers were a grim prelude to Friday's crucial nonfarm payrolls report, which is expected to show the economy shed another 289,000 jobs in October and the unemployment rate rose to 5.2 percent from 4.9 percent. Economists' greatest fear is that rising unemployment while the nation is fighting a war in Afghanistan and reeling from a bioterrorism scare at home will cause consumers to further scale back their spending, driving the economy into an ever deeper slump. ``Clearly, an unemployed person will have a difficult time taking advantage of lower rates for new purchases,'' said Tom Sowanick, chief fixed-income strategist at Merrill Lynch Government Securities.

Black Blade: The Recession is set to deepen even more. Under current valuations I would say that the equities markets should fall by at least another 60%. Gold and Silver asset protection is still quite cheap. This recession will be a long painful drawn out affair. Warren Buffett and George Soros also have stated that this will be a long severe recession. In a word - "GRIM"

The crew and techies on the Liberty did not know what was being done with their signals collections. None of them would ever be able to understand it from their vantage point, had they known, they may have sabotaged their own operation.

I read the testimony you quote. I would not be surprised if such actions were taken by some Israelis against captured Egyptian POWs as they were taken by Arabs in each of the wars, as the Japanese did with US POWs, as Germans did with practically anybody they felt was a good defenseless target, as US forces did with the some 30,000 German POWs that were put in one of their own camps and starved to death on purpose, as the Soviets did with Poles and Germans, and as everyone who was ever involved in a war knows will happen.

At least on the Israeli side you find two pilots who refused to shoot defenseless survivors from the ship.

War is hell, for some it breaks the moral backbone.

As far as the illegality of the attack on the Liberty, I suggest that since Naval Attorney Jacobsen did not have a clue as to why the boat was there and what was being done with its signals, he can't presume to form a legal opinion about it.

Get real Mr Blade, allies spy on each other just as readilly as they spy on enemies. Outside of direct existential issues, spying is a simple commercial business open to the use of anyone who can afford the people involved, and they cost far more than a Senator (at least the Democrat ones). If you want some more Israeli spying to get mad about, take into consideration the rumor floated on the net a year or two back that Clinton's closed White House E-mail system was hooked directly to Israeli inteligence. Intel is dirtier than war and the hidden status of the operators is the simplest way to create opportunities for mischief. Power corrupts. Secret power corrupts more thoroughly and the corruption is seldom revealed. Behind any shield of secrecy are the skeletons of the innocent.

The moral posturing is unbefitting a real-politic discussion. If you want to moralize on war and secret operations of intel, it is only within the issue of how to police their actions that such moral questions have a place. Without this kind of third party policing of Intel operations you must accept that they would rob the taxpayer blind and plot for their own purposes. One should expect that their activity is often enough focused on covering up their last batch of misdeeds and errors rather than collecting and analyzing actual info on actual enemies.

The survivors of the USS Liberty are focusing on the wrong line of reasoning. If they want to understand the circumstances of what had happened to them they would have to start by putting away any preconception of their leaders and upper echelon career people as being "upright patriotic citizens". They can't be such. If they were, they would have altered the structure and operation of their departments and asked congress to restrict their resort to secrecy and eliminate their immunity from criminal and civil prosecution. They would also have installed a strong independent ombudsman and review system for the secret services. That they did not do so is evidence enough that their honesty is at the very least suspect, and in any case "upright patriotic citizens" is not quite what they are. Not here, not in Israel, not in Europe, and definitely not anywhere else on earth. Their very function precludes it.

The legendary hedge fund investor has tapped one of the world's top stock pickers to run his empire and rebuild a depleted team at a time when Mr Soros' signature investment style is coming back in vogue.

Mr Soros, 70, appointed William Stack, 54, who once managed US$60 billion for German bank Dresdner RCM Global Investors, to be CEO of Soros Fund Management. He replaces Mr Soros' son Robert, 38, who took the job last year.

The seasoned global investor's forte is stocks. But Mr Stack is also well-versed in fixed income and currency trends, key to the global macro style that made and cost Mr Soros billions of dollars in recent years. Now Mr Stack will watch over US$11.5 billion in assets currently managed by the firm and outsiders like Stanley Druckenmiller, who quit as Mr Soros' chief investment officer last spring.

Mr Stack will also work closely with a new chief investment officer, who will likely manage an in-house portfolio.

Hedge funds are loosely regulated investment pools aimed mainly at wealthy individuals and pension funds. This year, such funds have outperformed the stock market, returning an average 2.2 per cent since January, when the Standard & Poor's 500 index dropped more than 20 per cent.

'William Stack is a broad-gauge global investor and although he is a stock picker, he would be familiar with other trends,' said Richard Lannamann, who conducted the search for recruiter Russell Reynolds.

The two new hires - the chief investment officer has been picked, but not named - end Mr Soros' summer-long search for a successor and arrive just as his global macro investing style is paying off again after a few lean months.

'George Soros is the pensive type who pounces on a trend when one develops. He sees how changes in government can affect the global macro investment style and he's getting ready,' said Charles Gradante, president of the Hennessee Group, which advises hedge fund investors.

Last year Mr Soros reorganised his flagship Quantum Fund when losses in tech stocks forced him to rein in an aggressive style that earned him US$1 billion when he bet against the pound a decade ago. That move scuttled Britain's plans to join Europe's currency union and earned him the nickname 'the man who broke the pound'.

Now the tide has turned again as global trends are becoming clearer after the attacks in the US in September.

The real comeback will start when Soros Fund Management lets in new investors again. 'That's the key. Once he takes public money, that will be the sign he's getting back into the global macro game in a big way,' Mr Gradante said. - Reuters

Man, I'd love to be a member of a 'club' where Phyllis Diller was a 'chosen' member. That would be a smart group.
What a cute, nice little group it must be. I love the concept. And all for love too. I hope the members of the club have enough sorrow for a pathetic 'non member' like me to let me in if I can amass enough gold and silver. Hopefully some members will leave some gold and silver when they ascend to wherever they go when they spend eternity with Phyllis, and other 'super cool' people like her.

Snippet:
". . . It was expected in the wake of the Central Bank Agreement on Gold in September 1999 (CBAG - also called the Washington Agreement on Gold, or WAG) that lease rates would rise. This is because the 15 European central banks (including the European Central Bank, or ECB) agreed not only to limit their collective gold sales to 400 tonnes per year, but also to cap gold lending at the then outstanding amount. With a cap on gold lending, any increase in demand would raise the lease rate.

But as it turned out, the year 2000 saw a decline in lease rates as producers backed away from hedging their gold production forward. With U.S. interest rates rising, furthermore, the decline in lease rates opened up a substantial contango, or premium on the forward price of gold. Speculators and "hedge" funds were quick to pounce on the widening contango - by selling borrowed gold and depositing the proceeds in the U.S. credit market. This gold "carry trade" was profitable as long as gold did not rise. And since gold didn't rise, "speculators" were generally short gold for all of the year 2000. Recently this situation has changed. Central banks, in an effort to improve their return on gold lending, have moved out on the yield curve, lending gold for longer periods of time. Less lending for shorter periods has meant a higher short-term lease rate. As well, the available pool of lendable gold seems to have dried up as the cap on lending has been reached. This has also helped to raise the lease rate.
On the other side of the equation, the U.S. has been lowering interest rates quickly this year in an attempt to forestall a recession in the aftermath of the technology "bubble." Ergo, higher lease rates on the one hand and lower U.S. dollar interest rates on the other has meant that the contango for gold has narrowed. This has reduced the incentive underlying the gold "carry trade." Indeed, with gold showing more signs of life, there is a disincentive to be short the market. Not surprisingly, therefore, speculators are now playing gold on the long side; CFTC data show that "speculators" have taken on the largest net long position in gold since February 1996, when gold last rose above $400.

. . . . Murenbeeld says gold has a very bright future. And almost every factor he cites has now been exacerbated with the terrorist attacks in the United States. The economy continues to slump, which at some point could put pressure on the US dollar. Interest rates continue to decline - the "contango" he talks about is now non-existent. There is no incentive for producers or speculators to sell gold short. And the money supply in the United States is increasing, making inflation a strong possibility in the New Year.
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Thought for the night; "All is fair in love and war"
- NetkingView
Yesterday's Discussion.

Never think that war
no matter how necessary
nor how justified is
not a crime
E. Hemingway

BR549 You find 'slaughter of innocents' offensive - especially since all the bodies at WTC have not yet all been identified? Would it make a difference if they were all identified?

It appears that 'finding things offensive' has now become a rather over played clich� which serves no other purpose than to stimulate emotion in favour of one's particular argument. I notice it is one used by so many posters with connections of ethnicity to Israel whenever that country is criticised.

About your 'hate of dusty books', you will note in my post to 'uponroof' I said 'no need to reach for musty history books'.

Uponroof: I checked back to your original post. You did not make it quite clear that you wanted incidents in this particular 'conflict' of slaughtering innocents by Britain and the US. However, you cannot divorce what precedents are set on one occasion from another. Once these things are done they become examples. The greatest teaching is by - 'monkey see, monkey do.

We glorify the great resistance, and freedom fighters when they are on our side. Lets see, how many films did we make about them, or stories write about them?

Now, when they are used by our 'perceived enemy' - they are evil men, murderers, or terrorists.

When British bombers slaughtered thousands of 'innocent' women and children in the cultural city of Dresden, that was just the misfortunes of war I suppose. The hundreds of old men women and children - some clasped in their mothers arms. that were slaughtered by standing them in a ditch by the American forces in Mai Lai, and other villages, were 'accidents' too?.

I could go on and list many, many, more. The American Indian had a saying about walking in another moccasins. I recommend this to you. By that I mean, try to see, without government implanted doctrine, the other guys point of view.

Now, as far as this 'war' is concerned, I pay no attention to it. Why? Because to my mind it is as phoney as a three dollar bill.

Today it has been announced that they have news that certain California bridges are going to be attacked. I guess the Anthrax scare is now wearing thin, or perhaps people are beginning to notice that the 'victims' (who died) are all but one from ethnic minorities.

Well, it keeps the people behind the government and their minds focussed away from the deteriorating economy and the company layoffs.

Cynical? Of course I am, and people have seen enough from the present as well as past events to be that way.

This is all taking us away from our main topic so I feel it is best left here. If you want to go on fine, but I feel enough has been said on this subject from me.

But remember this, for every 'terrorist' you kill without addressing the cause of why he is that way, you create more for your future.

Buenos Aires, Nov. 2 (Bloomberg) -- Argentina plans to default on at least $95
billion of bonds, more than twice the amount Russia failed to honor in 1998, by
swapping the debt for securities that pay lower interest rates.

President Fernando De la Rua said the government will cut $4 billion of interest
payments next year by exchanging new securities that pay average rates of
about 7 percent, compared with 15 percent now. Argentina's floating rate bond
fell 14 percent to an offer price of 41.75, to yield 69 percent, according to J.P.
Morgan Securities Inc. The one-day peso interest rate tripled to as high as 190
percent.

``This is something new for the financial community in terms of order of
magnitude,'' said Mauro Leos, an analyst at Moody's Investors Service. ``It is
unique in every respect.''

WASHINGTON (Reuters) - The U.S. job market suffered its heaviest blow in more than two decades in October, shedding a staggering 415,000 jobs as the full impact of the devastating Sept. 11 attacks struck an economy already in the early stages of recession, a government report on Friday showed. The Labor Department said the national unemployment rate soared half a percentage point to 5.4 percent last month from 4.9 percent in September -- the highest in nearly five years since a matching 5.4 percent rate in December 1996.

Analysts said the report pointed to a broad and steepening economic slowdown and boosted the odds for another aggressive cut in interest rates next week by the Federal Reserve. October's job losses were the sharpest for any month since May 1980, when 464,000 were dropped from payrolls, and came on top of a revised 213,000-job decrease in September -- even worse than the initially reported 199,000 job loss.

Black Blade: So grows the "Bone Pile" as many more nonessential "Bones" are cast aside in a deepening recession that should prove to be long term and extremely severe - an economic crash possibly rivaling the 1930's Great Depression. Get out of debt, get basic necessities, get gold and silver portfolio insurance, and have enough cash to cover expenses for several months. Hang on for the ride. In a word - "GRIM"

Belgian, I am a Chemical Engineer by training and have some years of practice in oil refining, shale oil, colloids, ammo and arms, environmental science (treatment and assessments).

I know with certainty that all that can be extracted from oil can be extracted from coal or coal with nat-gas. Some additional items play into the mix in agriculture and nuclear assisted marginal oil shale and coal extraction and liquification, and in ag. etc.. By the way, Nuke assistance simply means supply of hydrogen for cracking and reforming heavier coal, tar sand, and shale organics, and using marginal heat from the nuke plants for energy.

Irrational fears and nihilist environmental activists stand between any economic project in this field and its application. Thus the most productive role for a chemical engineer is to preach against these irrational fears and unreasoned environmentalism, as well as working against politics - i.e. eliminating political decision making from economic endeavor, meaning less authority to government.

interesting... Kitco charts on silverA huge jump in the 6 month lease rates, almost one per cent, and an eight cent drop in paper spot silver, and voila, JPM was correct in where this market is going. Note that the activity in London would also indicate that those on the other side of the water knew what was to happen in New York.

Paper spot separating? I wonder if my dealer will sell me bullion at around $4.13 with a smile tomorrow.

What has not yet sunk in is this 'body shedding' is not a temporary abhorrence that once the economy picks up it will be 'back to work again'.

Technology has made, and is making on an ever increasing scale, 'live bodies' redundant in many companies. This had existed for some time, it was just not easy to do on a large scale without considerable social unrest.

It has been happening little by little for some time. There was a need to move quicker so, 'very conveniently', Sept 11th came along.

Labour intensive work, what little there will be, will be sited in low labour cost countries which is the trend now.

The greatest negative effect on a population will be in the United States for the simple reason that they were higher up the ladder (higher you are the farther you fall.)

You will soon know why your military is on high alert - it is the coming social unrest they are practising for. You doubt me, anyone? Well, I don't think you will have to wait too long.

If the establishment manages to keep you focused overseas on some 'bogeyman' created by Hollywood and the CIA, it might hold it off for some time.

As you say - exciting times ahead. Of course, it really depends on one's brand of excitement.

Watch China and Russia for stirrings in gold and listen to not what is said, but what is done - actions speak louder than words and are easier to understand.

WASHINGTON (Reuters) - New orders for goods made at U.S. factories dropped sharply in September, the government said on Friday in a report that provided more evidence the U.S. manufacturing sector's year-long recession is far from over. Led by large declines in orders for transportation, computer and electrical equipment, the value of U.S. factory orders in September fell 5.8 percent -- the biggest drop since January -- to a seasonally adjusted $313.15 billion, the Commerce Department said. Orders fell 0.1 percent in August. The orders decline in September was worse than forecast by Wall Street analysts who on average figured factory orders fell 4.7 percent in September.

Black Blade: Looks to get much worse. This recession will likely be very severe and protracted. There is absolutely no positive economic news anywhere. The Pied Pipers struggle to spin anything positive but only come up with the same old tired clich�s such as we are at a "bottom" - "stocks are cheaper because prices fallen" - unfortunately PE ratios have rocketed higher due to lower earnings, etc. Everything is beautiful until one removes the rose-colored glasses. The latest economic data over the last several weeks has been dismal at best.

I gotta run, however, it is true that new technology in a service-economy we will find many jobs redundant (such as bankers, brokers, etc.). Those that actually are producers may find some protection and even then it will be rough as consumer confidence crumbles. We are living in "Interesting Times." I am afraid that the "Times" will become even more "Interesting." Cheers!

Well, with unemployment now at 5.4%, I hope those other than goldbugs have prepared for things to sink deeper and deeper. IMHO, get rid of paper (except toilet paper and store plenty) and put it in gold and silver. I also believe that we should be prepared even more than we did for Y2K...food, water and bartering items (which would be considered luxury items on down the line. Chocolate, sugar, liquor).
But first, call our host and get gold in small and large denominations.

Also, are you familiar with potassium iodide? Check it out. Used for radiation and non-prescription and FDA approved.

I consider all the above as insurance, not panic actions.
Later, Interstate

http://www.usagold.com/Order_Form.htmlGold was up slightly in the early going with little in the
way of news to encourage movement in one direction
or the other. Investors instead are looking to the
medium and long term attempting to ascertain what
portfolio structure makes the most sense in the wake of
the September 11 and the onset of economic conditions
which reveal a more threatening aspect by the day.

Today's employment numbers are a case in point
showing a troubling 5.4% overall gain year over year
-- up from 4.9% last month. Investors are adopting a
more defensive attitude and for many that means a
diversification into gold. Report after report (See links
below) from every region of the globe -- from North
America to Europe and Asia -- tells of increased
interest in the metal, increased inquiries at bullion
dealers and more metal being pulled out of circulation.
In the same vain, a greater number of analysts from old
time gold bulls like James Dines and Howard Ruff to
formerly adamant bears like Andy Smith and some of
the big trading banks have surfaced to say that gold's
time has come. Something's happening in the world
economy and investors and analysts alike increasingly
are turning to gold as an insurance against an uncertain
financial future.

According to CNBC's Money Central, two of gold's
legendary enthusiasts, James Dines and Howard Ruff
-- both subdued about the yellow metal in recent years
-- are now back touting the metal in full force. James
Dines "sees a major recovery in gold prices during the
next big currency crisis. He see it erupting first in
Argentina or Brazil some time next year and affecting
all of Latin America, including Mexico. He expects that
the response to a currency problem will be similar to
the 1997 flight to gold when Asian investors turned to
the precious metal as their economies and markets
collapsed around them."

[Ed. Note: According to a Reuters article, Argentina
appears headed today for a debt crisis and currency
devaluation likely to cause major problems throughout
South America and rattle Wall Street. The one-day
peso rate overnight jumped to 80% today with capital
drying up in that country. ]

Likewise Howard Ruff sees a new bull market
developing in the months and years to come "[I]n the
long run," says Ruff, "gold bought at today's prices is
going to be worth a lot of money at some time in the
future." When pressed about how far away that future
might be, he said, "Not tomorrow, or next week, but
perhaps one, two or three years from now, it has the
potential to be worth $2,000 an ounce."

Have a good weekend, fellow goldmeisters. I think
you will enjoy the articles quoted and linked below.

Note: If you would like to receive an information packet on gold (how to buy it -- our products and services) and a free trial subscription to our newsletter, News & Views, please go to the link above. For those seeking a higher level of understanding with respect to the gold market, many of the portfolio issues addressed briefly below are covered in detail in our latest 32-page Quarterly Review. Please go to the link above to register for your packet. Registration includes trial period access to our Commentary & Review page. Today's report sans links and referenced articles is offered below for those first-time visitors who might have an interest in an (almost) daily report on the gold market with our spin not the mainstream media's. MK

Pandagold: War is a tool, not a glory of man. Generals not among the manipulators have taught us it is right to hate war, while politicians who needed our participation have tried to keep us tilted in controllable (by them) directions. This is all understandable, predictable.

War thrives on romanticism, a specialty of "livin' in the USA". Cynicism is a brake on romanticism, but it sure freezes the soul if that's all you've got. Just reminds me to keep on moving in the few things I may still be idealistic/energized about. "Food" for the soul.

Gold as a tool, a means, not an end. Gotta think a little more on that and put things in proper relation.

Michael: Hope Ruff is right. Could use a little of that 2k stuff. As Neil sang it so long ago "Keep me searchin' for a heart of gold. And I'm gettin' old."

There is nothing in those dusty old books that has to do with the first war of the 21st Century

Pandagold (11/2/01; 03:01:29MT - usagold.com msg#: 64537)---" About your 'hate of dusty books', you will note in my post to 'uponroof' I said 'no need to reach for musty history books'."

What you said in your previous post is: "Rather than me start listing them (BR-�them� is the slaughter of innocents), just stop and reflect, you don't have to go reaching back into musty old history books."

This is also my final post on this subject but you still have NOT listed any policy in effect by the Allies that calls for the "slaughter of innocents", outside of those musty old history books, HAVE YOU?

Credibility -- You were asked twice by two separate posters to "BACK UP" your previous statement in your previous posting and you cannot. We all know why.

Any references outside of the 21st Century are as meaningless about the "slaughter of innocents" in Afghanistan as the War of 1812, WWII, Viet Nam and all of the other past wars. The term "slaughter of innocents" is such a meaningless offensive term used by some as a rationale for "doing nothing" to combat world terrorism.

I'm surprised that no-one has commented on Murphy's comments about the large hedgers yesterday.

"Apparently Anglogold told a questioner in London yesterday that shrinking gold liquidity meant Normandy's hedgebook is not sustainable.Bringing it down to Anglo's policy implies a 3 million oz. reduction."

"AU,ABX,PDG have hedgebooks which appear mark to market negative around $280,low 290's and 310 or so."

``People don't have as much use for silver anymore,'' said Mario Batelic, president of Gemark Corp. in Newburgh, New York, a supplier of recycled silver to Kodak. ``The photographic industry is not doing well.''

No use for silver, huh? I guess that in the derivatives since, silver investors could buy puts in silver and calls in Kodak.

Anthrax found in two European countries now and in the mailbox of a USA Anthrax victim. Indeed a world problem. I am going to start wearing my Israeli gas mask into the post office to retrieve my mail.

The South Africans were (obsessed) pioneers (1960) in oil-substitution research : SASOL I and II . BTW, a former Kennedy's play. Oil substitution is only one of the elements, that are involved in the management (by OPEC) of the POO. But my point is, that something has changed, from the Gulf war, onwards ! A major part of the *cheap* oil is slowly to become -islamized-. And it is here that the very tricky Russian factor will come into play. Not with islamization as such, but as a starting base for the rebuilding of this plundered country.

The POO is not only of dramatic importance for the global economy, but also, more and more a vital instrument for approx. 2 billion people on the quest for prosperity !
The management of the POO is gaining in complexity (more parameters, economical/political). Probably part of globalization and expansive urge to participate as homo economicus. etc...

Intervieuw (CNBC-Europ) with Bobby Godsell (CEO Anglogold), complaining that there are not enough possibilities to service the increased demand for Gold as an investment (coins/bars/etc). CPM ? Marketing-campaign ?

http://www.gilder.com/AmericanSpectatorArticles/Deflation.htmIn 1996, as Internet investment accelerated and the election results pointed to a tax cut in 1997, the price of gold began its decline. Mostly blind to these developments, even misreading them as inflationary and deploring them as "irrational exuberance," the Fed failed to supply the liquidity the market needed. Greenspan was worried about the mini-inflation he allowed when the Clinton tax increase of 1993 reduced the demand for liquidity, and the Fed did not remove the surplus by selling bonds. Gold had averaged $350, more or less, since 1985. It rose to $385 in 1994 and stayed there, despite Greenspan's efforts to squeeze out the inflation with higher interest rates. The classical economists could have told him, as did I, that he could only bring down the gold price by selling interest-bearing bonds from the Fed's cache, withdrawing the liquidity. But gold had been so demonized by the demand-siders that Greenspan probably believed he would have been ridiculed for any gold-based move. So he hunkered down and hoped for the "best."

The best, as I see it, is that the deflationary process has only been partially completed. It cannot be reversed unless someone the president respects picks up the phone and tells him there is no remedy except an inflation to readjust the gold price. With Greenspan now turning 75 and wishing to retire, the pieces may fall into place before year's end. When it does, the gold price will either shoot up and stop at a point where the interests of debtors and creditors are in balance, or it may shoot up much higher, as it did when the deflations of 1982 and 1985 ended. Long-term interest rates are as high as they are, even in this deflation, because they have experienced this phenomenon before.

Inflation hawks, of course, will deny that deflation is possible while the CPI ekes up and various money supply indices bulge like mattresses in a banking crisis. The CPI was also registering "inflation" during the 1981-83 deflationary squeeze, as it is today. Then, the indices were still being driven up by the previous inflation and had not yet fully reacted to the dollar/gold price. Because contracts can take decades to unwind, this process is gradual. Only now are we beginning to see the "noise" created by the deflation-induced crude shortage removed from headline consumer and producer price indices.

Thirty years after going off gold, there is virtually no talk anywhere in the world of going back to it. We seem to have somehow gotten along without it after all. Or have we? Those who continue to believe a dollar/gold link is the only way the market can effectively tell the Federal Reserve how much money it needs are now prepared to argue that the world can no longer endure a floating standard of value. Jack Kemp, a leading Reaganaut of the 1980s and champion of gold and low tax rates, most recently reiterated that there really is no alternative to a gold anchor. He sees how gold would have prevented the accumulation of errors that now bedevil our economy�and that of the entire world, which looks to the United States dollar as the key currency. It is always the poorest people and the poorest countries that are most damaged by the absence of reliable standards of measure. The Third World would benefit most with a return to gold. But as the only superpower in a unipolar world, the United States is the only country in a realistic position to make the move.

Pandagold (msg#: 64537)BR549---"You find 'slaughter of innocents' offensive - especially since all the bodies at WTC have not yet all been identified? Would it make a difference if they were all identified?"

On Thursday, the New York Fire Department added 240 new members to its ranks, handing out diplomas to trainees at a ceremony marked by six empty chairs -- seats symbolically held for classmates who died in the trade center collapse. "

BR-How insensitive to the victims families that were "slaughtered" in 911. If this report was from Afghanistan, then it would probably would have ended up in one of your posts.

Living memory is not the war of 1812, or even 1917. Many many people are still alive from the second world war, and more also from Vietnam, you do not have to look in dusty history books. So please cut the crap. I also explained how these are totally relevant, and cannot be ignored, though you may choose to.

Do you want me to go on about the atrocities being carried out by Israel AT THIS PRESENT TIME- they are well documented - and photographed.

The first real terrorist groups The Haganah, The Stern gang and the Irgun, that appeared after the second world war, not only killed British civilians but even their own Jewish civilians when it blew up the King David hotel, and put bombs in other public places. The success of these terrorist groups (I suppose to you they were freedom fighters) gave the idea and the impetus for other groups with an agenda to go on the rampage.

Now Israel, a nation born with the help of its terrorists, cries because a people fighting for its existence strikes back with the same weapon.

You should also learn who first perfected, introduced, and directed, chemical warfare against an enemy. No, it was not Iraq. His name is Fritz Haber - a German Jew.
Wear your Israeli gas mask with pride my friend.

You, sir, may have a convenient short memory, but others do not. 'Monkey see, monkey do'. What goes around comes around.

This is the real problem with this world, there are too many people who only want to remember that which suits them, or their cause. But, alas, it does not work that way.

They often get reminded by events that can be devastating, and often others suffer as a result.

You've both been doing so well for us lately, keeping us thinking about the bigger picture we're living in. When you go slightly OT to make a point about gold & economics, we follow. When you go far down one of the trails, we hesitate. When you quarrel over a fork in one of the trails, and it starts to sound personal, we feel embarrassed and wish we were somewhere else. We want you to come back to the context where we so much value your contributions.

Me, pondering the infla,defla, lala question once more: It seems much more important just WHO gets the newly-"printed" money in a time of collapse, and then what THEY do with that money, doesn't it? It starts to get much more directly traceable (wish it were, anyway) to individual institutions and their investment positions.

For example, Fed looks like it's going to end up propping up the FNM and other GSE paper, by purchasing it with Fed fiat. That cushions the crucial housing market when paper prices are dropping all around it. But, most important, it bails out GSE paper-holders, makes them whole. First ring of preference, after T-bond holders? They get a check, and the Fed gets to work out our future mortgage payments. (?Does it point this way?, check me on it)

The former GSE paper holder now has $ in his checking account. Liquidity seeks inflating assets. He knows that values are crashing down around him, and housing will follow eventually. His move must be into unleveraged REAL assets, like PMs.

Unless he is bound under some terms of the Fed bailout to keep his money in the desired arena, his self-interest calls for moves in our direction.

The questions during a recession are: WHO has the cash, and WHO has pricing power?

This is how Fed money-"printing" moves gold up, in otherwise deflationary times.

Good Sir, may I direct a question you way in regards to the various 'independent' Central Banking institutions across the globe? The pupil is in search of the teacher. Would love one of your extensive and in-depth analysis, but will settle for what you are willing to explain, or even a pertinent reference. These questions have been expressed a couple times in the last week or so w no takers. I have no doubts that you are more than capable of expounding on this issue if you would be so gracious.
Starting with our own Fed, its owners are known and fairly available to a 'seeker'. Of course there is a degree of common ownership between the Fed and the BoE, and I will further venture this 'commonality' extends outwards to Canada, South Africa, Australia, and New Zealand just for starters.
How about the various EU countries? There have certainly been 'mergers and acquisitions' throughout the centuries, no? The simple fact that the same folks keep marrying the same folks speaks for commonality of CB ownership here.
China is most intriguing to try and figure out along this line of thought. Are they strictly centrally planned w/o outside influences, or have the ancient European and Chinese passages left footprints? Brits to HK to China? Same goes with Russia {even more so} with their previous monarchy.
How about South America, which has deep European ties, being former 'colonies' to a degree at least? Of course there are many methods of 'influencing' a country such as Ecuador into gold market participation, really no point in elaborating right now. Common partial ownership or undue influence wouldn't hurt the cause.
I would guess that the Islamic world of CBs is a world unto itself. How does all this break down?
Are CB ownership 'chips' subject to transfers or M & A's? Hostile takeovers? Can you advance this line of thinking for many of us?
Thank you in advance, ORO.
Kind regards,
auspec

I see we are going to have to agree to disagree here. Quickly, let me end with this:

E Hemmingway, someone who lost a war with himself, is hardly a source for what war is about. You may prefer his idealistic view of it being 'a crime', I understand it as a necessity in this cursed world.

Pandagold: "...Uponroof: I checked back to your original post. You did not make it quite clear that you wanted incidents in this particular 'conflict' of slaughtering innocents by Britain and the US. However, you cannot divorce what precedents are set on one occasion from another. Once these things are done they become examples. The greatest teaching is by -'monkey see, monkey do..."

You have replaced the examples I seek with your theory of "precedents set on one occasion from another...monkey see, monkey do...". No good. No accountability. We could justify every homicide since the Garden of Eden through this philosophy.

I would like to see something equivalent of the very intentional killing of 5000 completely innocent civilians, which was perpetrated on the Taliban. While you're at it please try to explain why these 'oppressed muslims' are executing women for expressing themselves as equals.

If not, that's OK. I have a very good idea of where you're coming from now. My understanding of your position is enough. Persuation through a keyboard is almost impossible. Perhaps another time in a pub over beers my friend. Till then the endless quest to change others opinions will wait.

Uponroof I have said my piece, and Mr Gresham has made a very valid comment which I will take to heart.

However, in your feeling that you know where I am coming from, I do hope you include that I am, as yet, not totally convinced of who really is responsible for Sept 11th.

I have learned not to trust what politicians want me to believe. I also believe in our system of English justice that a man is innocent until proven guilty by an impartial judge and jury- whatever the crime.

potassium iodidePotassium iodide which is in some brands of table salt does have the capability to ward off radiation sickness when the thyroid is saturated. But is by no means full protection. Also if you are allergic to iodine can cause death.First reaction would be hot flashes. I know cause I am alergic to iodine and beside table salt, seafood can do me in. Anyhow it looks like Goldbugs are thinking about plenty of things that could happen.

The price of Gold is back to $280.00 Good,I can still buy some. Silver at $4.11 and my coin dealer still at $5.75.
Have to do some looking around,yes?
Slingshot

http://www.forbes.com/2001/01/30/layoffs.htmlAs the humongus pile of "Bones" grows ever higher, these few nonessential "Bones" just were added. It will get much worse of course as companies struggle to remain viable. The 5.4% unemployment number is only the "Bones" that qualify for benefits and not the disqualified "Bones" or those sore old "Bones" that have given up. The unemployed now are about 7.8% of the qualified US population. The number is likely to grow upwards to 14% to 22% in the intermediate term and probably in the 22% to 28% range when correlated to historical data (projected worst case). Definitely get prepared for the other shoe to drop - get out of debt, get basic necessities, gold and silver portfolio insurance, defensively realign the investment portfolio (be very "picky"), and have enough cash set aside for several months expenses. Prepare for the worst and hope for the best.

WASHINGTON, Nov 2 (Reuters) - President George W. Bush made an urgent appeal on Friday to the U.S. Senate to pass his economic stimulus package, decrying last month's surge in unemployment as ``not good news for America.''

http://www.financialsense.com/stormwatch/update.htmI especially like the finish:
snippet*************
I go back to my original questions posed at the beginning of this article. How bad will this recession get, how long will it last, and what will the recovery look like if and when it emerges? That depends on many things that may be beyond the government's ability to control. It will depend on whether there are further terrorist acts and how quickly we are able to end this war. It will depend on consumer and investor confidence. It will depend on the strength and confidence of the dollar. It will rest on chance that there will be no more financial contagions or brush fires that will have to be put out. It will be based on the hope that inflation doesn't resurface, that energy prices remain stable, and the price of gold and silver can be kept from rising. "Depends" and "if" are big words in a time of recession and war. It will take more than countermeasures to keep them from striking their targets. ~ JP
*****************
Especially the reference to gold AND silver...

WW2 - Hiroshima,Nagasagi, Dresden. All aimed at instilling fear and killing as many innocents as possible. ( a bit like 911 dont you think)

1969 - when Nixon and kissenger launched their secret and illegal bombing of neutral Cambodia, witn American pilots logs being falsified to conceal the crime. Between 1969 and 1973 American bombers killed 3/4 million Cambodian pesants

1996- Israel massacred 102 refugees including women and children in a UN base in Qana, South Lebanon.

If you ask I will give you 100 more.

Its only a crime and acts of terrorism when it happens to us, Its a war when it happens to them. We are all murderers no matter which way you try and justify it

As the number of unemployed approaches 1 million and those who have been removed from the roles of benifits one can only imagine the hardships that will befall many families in the USA and around the world. Even if they find work at pay well below their past earnings they will still find themselves in dire straits. The industrial base of The USA has long gone to rust with the introduction of High Tech.
Has the plan been to reduce this country to a third world
participant even if it has superpower status in name only?
I feel that goldbugs at this time are fortunate to buy gold at this price while we still have jobs. For how long? The destruction of the middle class would be a major win for TPTB. Who would then buy the bullion while they struggle to put food on the table? While they frown at the mention of Gold they only condemn themselves to be servant to the ruling class. As one has mentioned before if each one of us would buy one ounce we would put such a demand on gold that it could free gold from manipulation.
As I have read over time your Body Count and your warnings have become more urgent,I wanted to show a direct corellation between the body count and the purchase of gold.
Unemployment, availability and a rise in the price of gold would put most out of reach to accumulate. The time is now to put away for the rainy day.
On the flip side, most people that lurk here will understand
unemployment and not all the market terms use in this forum and they may become Goldbugs.
Slingshot

The time between first discovering gold deposits and actually beginning to mine the gold can be as long as five years. Last year, this resulted in a positive $1.5 billion contribution to the nation's balance of trade.

http://www.goldinstitute.orgSome tidbits that I found while attempting to find the total production of Gold. The est. total is 1454.35 millions of troy oz's. The U.S. is solidly in 2nd place behind S. Africa in production.

"For many years, 75% or more of the gold needed by U.S. manufacturers was imported from other countries. From 1980 forward, however, U.S. gold production climbed steadily -- from one million to nearly 11 million ounces annually -- due to important advances in exploration, mining and processing technologies. Today, the U.S. is the world's second largest producer and can meet all of its domestic gold needs while still making 36% of U.S. production available for export. Last year, this resulted in a positive $1.5 billion contribution to the nation's balance of trade."

"The time between first discovering gold deposits and actually beginning to mine the gold can be as long as five years. This planning and preparation process is also expensive, often requiring an investment of hundreds of millions of dollars before the first ounce of gold can be produced."

"And because gold is biologically inactive, it has become a vital tool for medical research and is even used in the direct treatment of arthritis and other intractable diseases." Maybe someday a future cure for anthrax?

So if these Gold mines go out of business via too low a price, it will take years to bring the production back.

I wonder who is buying the $1.5BB the U.S. is exporting?

An interesting site for other uses of physical Gold for those who have not visited in a while.

As Joseph Sobran said, "You delude and flatter yourself if you think someone hates you for your virtues." Their deep hatred is rooted in years of bullying by the U.S. government, whose embargoes, bullets, bombs, and cruise missiles have been brought to bear on them whenever and wherever American politicians felt it in their own interests to do so.

"No one can find a safe way out for himself if society is sweeping towards destruction. Therefore everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us."(ludwig von mises)

I agree, but we all must keep in mind that all that is needed for evil to triumph is to misunderstand the nature of evil, and to target the wrong "enemy."

http://www.usagold.com/gildedopinion/Jensen/index.htmluponroof (msg#: 64571)---
Your posts are right on the money. Still no proof on this site of the Allies intentionally "slaughtering innocents" in Afghanistan. Collateral damage occurs in all wars: The Pentagon says the (Taliban civilian death) figures are exaggerated, but admits that civilian deaths are impossible to avoid in an air war, a.k.a., collateral damage. No INTENT here like with 911.

tg (msg#: 64582)"...we all must keep in mind that all that is needed for evil to triumph is to misunderstand the nature of evil, and to target the wrong "enemy.":

In reference to "evil" I quote Holger Jensen�"There have been some dramatic foreign policy realignments at home and abroad, and one can safely say that bin Laden has achieved none of his purported goals. In the words of British Prime Minister Tony Blair, "Out of the shadow of this evil should emerge lasting good."

Terrorism is different that any other war that we have fought because the evil is spread around the globe in over 60 countries. The Allies will eventually target the "right" enemy but unfortunately many civilians will pay the ultimate price in the meanwhile.

Mr Gresham (msg#: 64575)--
I read your link to Doug Noland -- Credit Bubble Bulletin. A great link but the horrors there, may have been more suitable reading on Halloween.(Ha!) "Lotsa" problems. Rea good stuff there.

BTW-I get your message and since Gold is indeed a "political metal" that the new economic and military war that that is being waged against terrorism is relevant to the world's economic situation and ultimately to the POG.

Listen to the words I do agree with about this new war of the 21st Century:

"Bin Laden's greatest mistake, perhaps, was in creating an alliance that no collection of religious zealots or Muslim states can hope to defeat. ..."He may or may not yet prove able to foment a Muslim uprising of great breadth but, by inadvertence, he seems to have made a far more potent alliance nearly inevitable. Only a strategic blunder even greater than his own will prevent the United States, China and Russia from joining now in common cause to protect the order and security of which they uniquely are guarantors."
--Holger Jensen

""No one can find a safe way out for himself if society is sweeping towards destruction. Therefore everyone, in his own interests, must thrust himself vigorously into the intellectual battle. "

That's a wonderful quote; Mises sounds like, guess who, Ralph Nader. We live in a pathetic age when someone needs to suggest to us that we each spend, not one hour a day, but one measly hour a week being CITIZENS of this free land.

(Every time the President says "consumer" in public, he should immediately be strapped down and forced to say "Citizen, citizen... " 100 times.)

It begins with SELF-education, and it is obvious that we and the denizens of a hundred other 'Net forums do more than our share in that regard.

(And look -- we even end up coming to some opposite opinions after that -- but the important factor is the INTELLIGENCE showing in and after the effort at self-educating.)

A majority of Americans are far from even beginning that self-education to participate in democratic citizenship. (Are we here, perhaps, over-compensating for them?) Some of that time would be better spent getting these ideas of Mises and Nader -- about becoming true CITIZENS, WHATEVER your opinion turns out to be -- to our families, friends and neighbors.

Both have been giving us (freely), more than enough fundamentals (facts), to conclude, without any doubt, that the US$, is and must be, at a dramatic cross-point ! Now more than ever before ! My strong intuition is telling me, that the US$, has "already", been abondoned. The US$, has been defended with *all* means, possible. With the elimination of the 30 years debt paper, some of the last indicators of the dramatic undertone, has been removed.
Who wants to issue debt, with the knowledge that he will be repaid with a dramatic declining currency ?

The political will to defend the US$, at any cost, will change into political unwill, when nothing will work anymore. POO / POG / INTEREST RATES / STOCKMARKETS / and last but not least "WAR", are dollar-symbols, that unilaterally pointed in only one direction of (virtual) strength. Cyclical nature of things, has been manipulated into artificial systematics. 365 days of summer !?

The trade deficit and the ever increasing debt, can't disappear with a US$, remaining strong. Lowering *all* interest rates in order to slow down debt-growth (interest on debt) and in a last effort to avoid default, has a limit, when at zero. Tomorrow, Yen and US$, are freely available, and no one wants them ! Because, what are you going to do with it ? What kind of real economic initiative are you going to undertake with this easy, costless money, available with trainloads ? Some more financial gambling ?
Investing in real estate to be sold or rented to the growing masses of unemployed ? Or keep on consuming ?
Ask the 200 million Japanese as economic force N�2, for some advise ?

And here I'm again with that stupid little word of "saturation". Congestive saturation of everything !
Not the start or restart of another era of renewed expansion, growth, peace and prosperity...but the ending process of stucking/suffocating total- mis-management. The path (political will) of least resistance. Laissez aller !

To get rid of the enormous, decades-accumulated, unproductive debt-load of the past...there is only one option left : make it totally *WORTHLESS* ! Hyperlalafladerla !

When Europ was still on its diversity of floating currencies, we experienced what this destructive competition of currency-lala, ment ! A negative spiral from the weakening currencies, around the strong German mark as anchor ! And then the euro. And positive results are to be seen in the previous weak, such as Spain, Portugal and already Greece.
Is there a similarity with the US$ and other weakening (floating) currencies around it ? No, there isn't !
The German mark anchor was (still is) intrinsically strong.
The dollar has to pretend strenght !
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Yesterday's Discussion.

For the silver bugs . . . forgive me but it's not good news for silver bulls from the Elliott wave forecaster, but don't shoot the messanger ok!

Snippet:
"Silver also reversed in line with our near-term bearish forecast. The highest probable wave count labels the $4.76 high intermediate wave (4) within a still developing Primary wave C . . . . Wave (5) is now underway and should draw prices below $3.48 to complete silvers 21-year bear market. Prices should not rise above $4.76. A push above this high would eliminate the current count and argue for a further rally."
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So there you have it, a view on the paper market, maybe heading down to around $3.48/oz unless the POS shoots above $4.76, hang in there . . . heck we've almost reached the end of that 21 year bear, not long now then the "big ugly grizzly" will get some lead as the bull wakes & roars. E waves theory's only problem is that the Ag physical is showing "some signs" in "some areas" of being harder to come by. Sir Michael/USAGold are kindly seeing what they can find out for me and Rich. with regards to the extent of Ag shortages as they see it in within the industry.

As for the southern hemisphere city where I live, the refiners & sellers keep advertising buy & sell prices for silver . . . yep it's "business as usual" folks, 1kg Ag bars at a current sell price of around USD$4.10/ounce (coverted from local $ to USD). . . BUT the only problem is they haven't got any to sell! "Come back in two weeks" or "we'll put you on our waiting list" is the common reply unless you order from much further afield and wait 2 weeks+ for delivery.

Something is "wrong" for sure, we are seeing (IMO) a definite gap between the paper & physical markets appearing, or so it would seem. As Sir Black Blade would say, "Interesting Days".
- Netking

DULLES, Va.--(BUSINESS WIRE)--Nov. 2, 2001--Taking strength from recent forecasts of a colder-than-normal winter for much of the country, spot prices for natural gas to be delivered in November advanced from October levels by more than a dollar to about $1.50, according to the monthly bidweek survey conducted by Natural Gas Intelligence. The benchmark Henry Hub price averaged $3.16 per Mcf, up from advance bids for October of $1.87 and a tally of HH spot transactions throughout last month of $1.93/Mcf.

The two bullish long-lead forecasts in mid-October accelerated the uptrend normally seen as winter kicks in. First Salomon Smith Barney's meteorologist Jon Davis predicted this winter would be similar to the last one and be in the top third of the coldest winters in last 106 years. Three days later the National Oceanic and Atmospheric Administration (NOAA) released its own chilly winter forecast, calling for a repeat of last winter's heavy Midwest and Northeast snow, and cold air in the South.

Black Blade: The energy crisis is far from over. Drilling activity has fallen off, AGA storage and injection data is in serious doubt, the AGA abandons storage and injection collection data under criticism from the NG industry due to questionable methodology, and new NG-fired power plants are coming online. A cold winter will draw heavily on supply.

So is the oil really running out? The answer is easy: Yes. Nobody seriously disputes the notion that oil is, for all practical purposes, a nonrenewable resource that will run out some day, be that years or decades away. The harder question is determining when precisely oil will begin to get scarce. And answering that question involves scaling Hubbert's peak.

M. King Hubbert, a Shell geologist of legendary status among depletion experts, forecast in 1956 that oil production in the United States would peak in the early 1970s and then slowly decline, in something resembling a bell-shaped curve. At the time, his forecast was controversial, and many rubbished it. After 1970, however, empirical evidence proved him correct: oil production in America did indeed peak and has been in decline ever since.

Dr Hubbert's analysis drew on the observation that oil production in a new area typically rises quickly at first, as the easiest and cheapest reserves are tapped. Over time, reservoirs age and go into decline, and so lifting oil becomes more expensive. Oil from that area then becomes less competitive in relation to other fuels, or to oil from other areas. As a result, production slows down and usually tapers off and declines.

Since much of the world's oil is now produced in ageing fields that are rapidly declining. The IEA concludes that global oil production need not peak in the next two decades if the necessary investments are made. So how much is necessary? If oil companies are to replace the output lost at those ageing fields and meet the world's ever-rising demand for oil, the agency reckons they must invest $1 trillion in non-OPEC countries over the next decade alone. Ouch.

Black Blade: It isn't a question of whether there is enough oil and we will "run out." The question is whether there is an abundant supply of "Cheap Oil" to fuel the economy to recovery and beyond. At the right price, currently uneconomic and unconventional oil resources become viable reserves. Higher energy prices will be required to develop new oil production, and higher energy prices will cap any economic recovery.

G.W. Bush is the fourth in line of weapon financiers and armed conflict catalyzers that stretch back to WW I.I was shocked to read of Prescott Bush's deep involvement in the rebuilding of the German war machine,which included,among many other shocking revelations;covert support for Hitler's terrorists.It is absolutely amazing to me that he did not spend time in prison for treason.

This family has a documented history of being involved in the defense industry and profiting in terms of wealth and power from blood spilled in wars.They also have a history of suppression of information that could prove damaging to their reputations.One does not have to go much farther than the Carlyle Group to realize this continues to this day.This is more than just coincidence.There is a pattern here.This is the family business;oil appears to be a side issue as a means of diversion from the actual real generator of family wealth and influence.

To question motives of GWB and his gang is not anti-American,unpatriotic or insensitive to the anguish suffered by those who paid such a terrible price on Sept.11.I would put forward that these questions must be answered to protect innocent lives on both sides of this conflict,as it unfolds.In addition,asking your elected representatives
difficult questions about their past conduct in creating the conditions for this tragedy as well their intentions to carry forward with yet more bloodshed is part of the American political process.This is free speech.

The truth,to it's fullest extent and impact,is not being presented to the American people.There are too many interchangable characters in this drama that deviate from friend to foe across a very nebulous demilitarized zone.The exploitation and control of vast oil and gas reserves,coupled with this administrations'connections and influence in this field,is too large of a conflicting agenda not to be examined with the upmost scrutiny.
These people must be confronted on this issue.

To me,this bears an eerie resemblance to the issue of US gold reserves.We are told they exist in their stated form,just as we are told that this is a war on terrorism
and the main objective is the safety of American people.
This society is supposed to be based on open disclosure,honesty,integrity and,flowing from this,the ability to make the best possible decisions in the best interests of all stakeholders in the American dream .

Futures prices for November natural gas climbed in October to $3.20 from $2.21 per million British thermal units, a 31 percent jump based on a third-quarter drop in gas drilling activity and forecasts for a colder-than-normal winter. See Futures Movers.

But the prospects for natural-gas prices and related company issues could begin to perk up even more as the U.S. enters the winter months, with third-quarter output of the commodity down nearly 2.5 percent among the larger producers, analysts said. "All it took was a downturn in (drilling) activity and a drop in the price for fundamentals of production growth to come to a screeching halt and begin to head the other way," said Credit Lyonnais analyst Brad Beago.

If the industry comes out of recession in late spring of next year, demand will start going up and with new power plants on line and deliverability starting to decline from the cutback in drilling activity, natural gas producers will have to increase production to make up the difference, he said. "Once you see U.S. demand start to accelerate again, providing our economy heats up again, then we're going to be short on gas," he said.

Black Blade: The limitations on energy supply will keep any economic recovery in check. AGA data is in question and natural gas in storage could be grossly overstated. The drop in drilling activity ensures that NG prices will remain high. There are nearly 300 new NG-fired power plants due to come online between now and 2006.

With prices well below OPEC's target price and showing no signs of a recovery, the group's officials recently have ratcheted up talk of plans to cut output to lift the price the group's reference basket of crudes to its target of $25 a barrel. The basket price stood at $18.25 on Thursday. On Thursday, OPEC Secretary-General Ali Rodriguez said there is a growing consensus among OPEC members to cut production by 1 million barrels a day. OPEC has cut production by a combined 3.5 million barrels a day, or 13%, this year in an effort to keep the price near its target. The effort was largely successful until Sept. 11.

Black Blade: At current prices OPEC will need to cut production by at least 2 million bbl/day. Should get "Interesting."

http://www.broadcast.com/shows/endoftheline/01archives.htmlWe are all programmed to believe what the PTB want us to believe. There are those that truly believe what they say is true and there are those that are paid hacks that propound so called rational facts that sound convincing. IOW's, question carefully lest ye be fooled.

"From hence, ye beauties, undeceived,
Know, one false step is ne'er retrieved,
And be with caution bold.
Not all that tempts your wandering eyes
And heedless hearts is lawful prize;
Nor all that glisters gold."

Thus spoke Thomas Gray
About a cat that lost its way
In seeking piscine gold
But some men, oh and women too
Seek by paper profits to pursue
And heed not of risk, when they are told

Some brilliant types wrote a formula of power
Then built a financial Babel Tower
Its value derived from paper
They called their enterprise LTCM
But soon the banks had to help them
Or "pffft!" see all turn to vapor

There is a simple "fact" that many "know"
By owning paper promises they think their worth will grow
Meanwhile more debts are owed
Ignoring recession, layoffs, no profits, war threat
Now listen: Gold is gold and no-one's debt
And that's all that should be told

In the last 6 months I have made an effort to study the bond markets. The announcement of the 30 yr. bond is IMHO very important. Please check these 3 articles, all discuss the implications in varying degrees.

"Are you worried that our 10 year bond, the new bench mark, will soar and squeeze off any recovery? Don't! We will just remove it from use and move to the 5 year,,,,,,,, to be replaced later by the 2 year,,,,,,,, to be replaced later by the 6 month,,,,,, 1 month,,,,,, 1 week,,,,, 1 day,,,,,, then
CASH!"

'Visibility' gets shorter and shorter.

I believe it was Cavan Man (please correct me CM)last week that mentioned "Re-finance Now!!". This observation may prove to be important.

Good Sir, may I direct a question your direction in regards to the various 'independent' Central Banking institutions across the globe? Please pardon the repost. The pupil is in search of the teacher. Would love one of your extensive and in-depth analysis, but will settle for what you are willing to explain, or even a pertinent reference. These questions have been expressed a couple times in the last week or so w no takers. I have no doubts that you are more than capable of expounding on this issue if you would be so gracious.
Starting with our own Fed, its owners are known and fairly available to a 'seeker'. Of course there is a degree of common ownership between the Fed and the BoE, and I will further venture this 'commonality' extends outwards to Canada, South Africa, Australia, and New Zealand just for starters.
How about the various EU countries? There have certainly been 'mergers and acquisitions' throughout the centuries, no? The simple fact that the same folks keep marrying the same folks speaks for commonality of CB ownership here. Who owns the Bundesbank, for examble? Strictly Germans? Do these same enttities own portions of other CBs?
China is most intriguing to try and figure out along this line of thought. Are they strictly centrally planned w/o outside influences, or have the ancient European and Chinese passages left footprints? Brits to HK to China? Same goes with Russia {even more so} with their previous monarchy.
How about South America, which has deep European ties, being former 'colonies' to a degree at least? Of course there are many methods of 'influencing' a country such as Ecuador into gold market participation, really no point in elaborating right now. Common partial ownership or undue influence wouldn't hurt the cause.
I would guess that the Islamic world of CBs is a world unto itself. How does all this break down?
Are CB ownership 'chips' subject to transfers or M & A's? Hostile takeovers? Can you advance this line of thinking for many of us?
Thank you in advance, ORO.
Kind regards,
auspec

In my research I found the following information:
Saddam Hussein had $5 billion loan defaults. The Bush administration had pledged taxpayer guarantees should Saddm default on the loans, which he did after invading Kuwait. More than $360 millon in American tax money was paid to the Gulf Internation Bank in Bahrain which was owned by 7 Gulf nations including Iraq. This was the first of an estimated $1 billion to be paid.

Author Russell S. Bowen wrote "The $1 billion commitment, in the form of loan guaantees for the purchase of US farm commodities, enabled Saddam to buy needed food on credit and to spend his scarce hard currency on the arms buildup that brought war to the Persian Gulf.

On Aug. 2, Bush was asked by reporters if he intended to intervene in Iraq's invasion into Kuwait. Bush said that he was not contemplating such action.
After a meeting with Margaret Thatcher that same day, Bush had a change of heart. Saddam had already told April Glaspie that his only intention was to get Kuwait back as part of Iraq. According to the transcripts of that meeting, Ms. Glaspie stated "We have no opinion of your Arab-Arab conflicts. Secretary Baker has directed me to emphasize the instruction, first given to Iraq in the 1960's, that the Kuwaiti issue is not associated with America."
This meeting was July 25.

After meeting with Thatcher, Bush called the leaders of Saudi Arabia and warned them they would be the next target of Hussein. The Saudis gave as much as $4 billion to Bush and other world leaders as secret payoff to protect their kingdom. This was according to Sheik Fahd Mohammed al-Sabah. Long after the Gulf War, audits found this money had been diverted into a London slush fund.

Bush soon drew a "line n the sand". And what do you know?The line was located between the Iraqi forces and oil interests owned by his son George W. Bush, who was a consultant to and a board member of Harken Energy Corp.

There is more about this War, but I'll leave the research up to you. There is a link called "Bush Watch" out of Austin, Texas that may be of interest.

I am not being critical with this info, and I think that George W. has a handle on our situation now. But I also can tell you that ANY politician carries a closet full of skeletons. Check out Henry Kissinger.
But I am a patriotic American who is proud to be here but one who loves history.

your Silver - Elliott Wave Int.Interesting times, indeed! With all those conflicting and non-sensical messages floating about about TAs, that would, on a cursory examination, be sound but are more in line with the new, faddish "New Age" economics, in this new age fundamentals are a separate entity from paper markets TAs and do not count.

I FULLY agree with what you say. We are running out of silver to the tune of some +63 million oz deficit per month on falling world production and less than 100 million oz. of known (documented) above ground supplies and YET the market has to bottom out to a brand new (inflation adjusted) low of $3.48 - or $.50 depending on point of view and end view timeline - unless we run out of silver, of course, in the "mean" time.

As you imply, the New Age economics would seem to mean that commodities now have to completely run out before positive market fundamentals are realized.

Argentina Faces Financial Disaster, our Upcoming Quarterly Review, and a CALL TO CONTEST, make that MINI-CONTEST

http://www.usagold.com/Order_Form.html"Are you worried about South America? Don't! We will print all the money it takes to save any and all US financial interest in that sector." -- FOA, Gold Trail Msg #128

If FOA is correct in his assumption above, then the Fed will need to gear up fast. It looks like the Argentine default is going to run to $132 billion according to a New York Times article this morning. The Times calls it "the biggest financial collapse of any country in history." To give you some perspective, that figure is twice the size of Russia's default in 1998 -- who knows what additional financial carnage this will cause as it rolls over to Wall Street beginning next week. We know though that Wall Street financial houses are up to their eyeballs in Argentine debt instruments.

So we suffer the revisitation of an old Horseman -- the Asian contagion, only this time its right in our own backyard. (Perhaps we should rename it!) The IMF has already backed off from this one. Does that put the Fed on the front line?

The following is a quote from the shrewd and historically erudite James Grant (Grant's Interest Rate Observer). His most recent treatise on gold and the merits of private ownership comprise the lead story for our upcoming Quarterly Review available by registering at the link above. We feel privileged to have received Mr. Grant's permission to re-publish one of the more important essays on gold written in recent years -- rights the Grant Interest Rate Observer does not allow readily. James Grant is generally considered one of the best, if not "the" best, financial writer on the Wall Street scene today. Those of you unfamiliar with his communication skills (and philosophy) will get a feel for it from the extract below:

"Grant's was bullish on gold long before Al Qaeda started getting its name in the papers and we were bullish for the right reasons. . .Following the roll-up of the European currencies, only four basic monetary alternatives present themselves: euros, yen, Swiss francs, gold. Of these, only gold is beautiful to look at and not replicable on a high-speed printing press."

The Grant essay runs for ten of the 32 pages in the upcoming Review complete with graphs and tables. We welcome your registration.

News & Views is now in editing and will be to the printer early next week.

P.S. This issue we also selected one of FOA's posts for a new section: The Best of the Gold Trail. Can you guess which one? Hint: It's not the latest quoted above.

- - - - - - - - - -

Hear ye! HEAR YE! A Call to Contest! A CALL TO CONTEST!

In fact (For all the Gold Trail hikers) let's have a MINI-CONTEST for the weekend. Which essay from the Trail was selected as our very first Best of the Trail and why? Let's keep it Short & Sweet. All who choose the right Trail piece as this Quarter's Best will get a silver eagle. Best short essay get's a one-tenth ounce Austrian Philharmonic. Contest ends Sunday midnight MST. Surround your entry with stars and include "Best of the Gold Trail. . . MSG # (Your choice)" in the Title. The one chosen was posted within the past 30 days. Who knows? maybe your favorite was our favorite. Good luck. One entry per poster.

In my continuing research into derivatives on an international basis, I went to the Central Bank of Argentinas WEB site and found some interesting information. There are derivative manipulations taking place but not much documentation as to how much Gold is left in their Treasury. That indicates to me that they have none.

According to their link the Bank may:

"a) purchase and sell at market prices, in spot and forward transactions, public bonds, foreign exchange, and other financial assets for the purpose of monetary and exchange regulation;
b) 12 assign to such Trust Funds as the National Executive Power may create, or to such financial institutions as it may authorize, the management and transfer of financial assets and liabilities;
c) purchase and sell gold and foreign exchange. In case it does so on behalf of the Ministry of Economy and Public Works and Utilities, as financial agent for the National State, such losses or income generated shall be credited to or debited from the National Government account;
d) receive gold in custody;
e) act as correspondent or agent of other central banks, or represent or participate in any
international entity existing or to be created for banking, monetary or financial cooperation purposes;
f) receive deposits in local or foreign currency.
g) 13 create financial policies which address small and medium enterprises and regional economies by means of differential reserves or minimum cash requirements."

But where is this Gold they can buy? Unlike the FED, they can also sell their Gold which I think they have done because I can't find it on their balance sheets or financial statements. Maybe loaned, or leased to another CB of to a foreign bank and carried under a different classification? Or I may have just missed it.

Since their main job is to protect their currency and they are in the process of default, who else will be affected via investing into this economy?

Out of their top 10 financial institutions involved in their financial system two of them are:

FOA correctly points out the failure of derivatives to produce any type of real value when compared to physical Gold. Once the derivative process begins to fail, the PODerivatives will fall and cause a corresponding rise in the POG. The infusion of billions into the US economy to fight the WAR and prop up a failing economy will cause FRN's to go beyond normal inflation and cause a massive failure in all paper based assets. Derivatives will then not be able to be covered by additional paper and demand will be made for settlement and delivery. Fiat will decline in real purchasing power and the POG for physical Gold coins and bullion will skyrocket.

FOA's words correspond with everything that I have been able to find out about derivatives, not only in Gold, but in other derivative underlying assets.

BR549

FOA (msg#111)--It was close between Walking On Solid Ground and #120 but #111 is outside of the 30 day posting range.

Gold represents economic freedom,just as AG has written of in his past.Freedom starts with the truth;in all it's horrible and frightening incarnations.If one believes in a free market for gold,one must work for the truth.

Gold is but a small part of this increasingly complex equation.Then again,with enough time and effort devoted to the cause of opening the deep storage vault to those outside the increasingly toxic inner circle,it could be the catalyst for opening many other doors. Gold threatens the absolute power of the dollar,we know this and so do they.

The media is complicent for the most part in pitching the official line.The people do not have to accept news packaged by high priced PR firms working for the administration and the Pentagon.Why do US taxpayers have to pay a premium for slick packaging of information they expect to come directly and honestly from their employees,the people who are directing this campaign?

I hear what you're saying buddy, we've got to ignore the "Wag The Dog" production on silver (the movie was actually on locally here last night). Eventually there will be ignition of this and the gold market, whichever ignites first will set of the other also.

As Mr Butler has pointed out by keeping the price low(paper) they are actually speeding up the decline of the remaining physical, what will ration the D & S dynamics is P R I C E. In the meanwhile it lets folks accumulate more Ag & Au at insane low prices yes . . . . many will look back at this year and "wish".
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*** "I'd Do A Better Job" Says Bill Clinton ***
Former President Bill Clinton thinks he's better trained and equipped to be a war-time leader than President Bush. At least, that's what he told Paul McCartney's girlfriend at a party -- and she told the press. According to Heather Mills, she asked him if he wished he was still president. "I said to Clinton, �Do you wish you were president now?' and he said, �I feel I would be better trained for it, more prepared.' " Just to refresh everybody's mind, President Clinton is the President who attacked the pharmaceutical plant in the Sudan, coincidentally three days after his testimony to a grand jury about his affair with Monica Lewinsky. Whether or not the Sudan and the handful of cruise missiles he sent on a mission that President Bush described as 'million dollar missiles in search of $10 tents' was justified is not the issue. The man who believes he would do a better job than Bush will forever be remembered as the 'Wag the Dog' president. He embarrassed the nation by his actions, and convinced the whole world that Osama bin-Laden was just a cover story. It's possible that's all it was. But if it weren't, it is all the more damning. Without the Lewinsky affair clouding America's real motives, we may have taken the threat more seriously and gone after bin-Laden in earnest, before September 11. A better war-time leader? We think not.
http://www.nypost.com/news/nationalnews/33176.htm

So,Sir Black Blade this is how I interpret your msg# 64589, I have taken the liberty to re-word it, more appropriately for the GOLD forum to which you posted. What do you think?

Snippit:

So is the gold really running out? The answer is easy: Yes. Nobody seriously disputes the notion that gold is, for all practical purposes, a nonrenewable resource that will run out some day, be that weeks or months away. The harder question is determining when precisely gold will begin to get scarce. And answering that question involves scaling Hubbert's peak.

M. King Hubbert, a GEOLOGIST of legendary status among depletion experts, forecast in 1956 that gold production in the United States would peak in the early 1930s and then slowly decline, in something resembling a bell-shaped curve. At the time, his forecast was controversial, and many rubbished it. After 1930, however, empirical evidence proved him correct: gold production in America did indeed peak and has been in decline ever since.

Dr Hubbert's analysis drew on the observation that gold production in a new area typically rises quickly at first, as the easiest and cheapest reserves are tapped. Over time, reserves age and go into decline, and so mining gold becomes more expensive. Gold from that area then becomes less competitive in relation to other minerals, or to gold from other areas. As a result, production slows down and usually tapers off and declines.

Since much of the world's gold is now produced in ageing mines that are rapidly declining. Geologists conclude that global gold production would not have peaked five decades ago, if the necessary investments had been made. So how much is necessary? If gold companies are to replace the output lost at those ageing mines and meet the world's ever-rising demand for gold, the geologists reckon they must invest 1 billion ounces of "gold equivalent" in non-GOLD-PEC countries over the next decade alone. Or they could take the alternate route, using CIA satellite spy technology, most of the world's shallow gold resources have been mapped. Now, if they can get "their geologists" into the gold mining companies, these are the geologists that will make the gold discoveries of the future. You know that nothing happens by accident. TPTB are already lining up the future gold finders of the world, so they can be rewarded appropriately. That is -- have someone else do the work, and have your guys get the credit.

Tannehill: It isn't a question of whether there is enough gold and when will we "run out." The question is whether there is an abundant supply of "Cheap Gold" to fuel the economy to recovery and beyond. At the right price, currently uneconomic and unconventional gold resources become viable reserves. More devious plans and schemes will be required to develop new gold production, and higher energy prices will cap any economic recovery. If higher energy prices are going to cap the recovery of gold, then something must be done about those energy prices.

Of course oil is consumed and gold is not. Gold is stored. In the 1930's there was more gold per person. Now there is a much larger world population and even as gold production techniques have impoved and become more efficient, there is less gold per person. So there are many similarities. Cheers!

http://www.goldinstitute.org/worldgoldprod.htmlFWIW-The above link chart shows Gold production on the increase in the world since 1840. Although I agree that small mines are bing driven out of business because of the cost of production being so far below the POG.

best speech iread from a usa congress man in years and "hit the nail on the head".he is 100% correct.

Statement By Rep Ron Paul, US House Of Representatives
10-27-01

Mr. Speaker, it breaks my heart to see what is happening to our country today. All Americans have grieved over the
losses served on 9-11. The grief for those who lost loved ones is beyond description. These losses have precipitated
unprecedented giving to help the families left behind. Unless one has suffered directly, it is difficult to fully comprehend
the tragic and sudden loss of close friends and family.

There are some who, in addition to feeling this huge sense of personal loss that all Americans share, grieve for other
serious and profound reasons. For instance, many thoughtful Americans are convinced that the tragedy of 9-11 was
preventable. Since that may well be true, this provokes a tragic sadness, especially for those who understand how the
events of 9-11 needlessly came about.

The reason why this is so sad and should be thoroughly understood is that so often the ones who suggest how our
policies may have played a role in evoking the attacks are demonized as unpatriotic and are harshly dismissed as
belonging to the ``blame America crowd.''

Those who are so anxious to condemn do not realize that the policies of the American Government, designed by
politicians and bureaucrats, are not always synonymous with American ideals. The country is not the same as the
Government. The spirit of America is hardly something for which the Government holds a monopoly on defining.

America's heart and soul is more embedded in our love of liberty, self-reliance, and tolerance than by our foreign policy,
driven by powerful special interests with little regard for the Constitution. Throughout our early history, a policy of
minding our own business and avoiding entangling alliances, as George Washington admonished, was more
representative of American ideals than those we have pursued for the past 50 years. Some sincere Americans have
suggested that our modern interventionist policy set the stage for the attacks of 9-11, and for this, they are condemned
as being unpatriotic.

This compounds the sadness and heartbreak that some Americans are feeling. Threats, loss of jobs, censorship and
public mockery have been heaped upon those who have made this suggestion. Freedom of expression and thought, the
bedrock of the American Republic, is now too often condemned as something viciously evil. This should cause
freedom-loving Americans to weep from broken hearts.

Another reason the hearts of many Americans are heavy with grief is because they dread what might come from the
many new and broad powers the Government is demanding in the name of providing security. Daniel Webster once
warned, ``Human beings will generally exercise power when they can get it, and they will exercise it most undoubtedly
in popular governments under pretense of public safety.'' A strong case can be made that the Government regulations,
along with a lack of private property responsibility, contributed to this tragedy, but what is proposed? More regulations
and even a takeover of all airport security by the Government.

We are not even considering restoring the rights of pilots to carry weapons for self-defense as one of the solutions.
Even though pilots once carried guns to protect the mail and armored truck drivers can still carry guns to protect
money, protecting passengers with guns is prohibited on commercial flights. The U.S. Air Force can shoot down a
wayward aircraft, but a pilot cannot shoot down an armed terrorist. It will be difficult to solve our problems with this
attitude toward airport security.

Civil liberties are sure to suffer under today's tensions, with the people demanding that the politicians do something,
anything. Should those who object to the rapid move toward massively increasing the size and scope of the Federal
Government in local law enforcement be considered un-American because they defend the principles they truly
understand to be American?

Any talk of spending restraint is now a thing of the past. We had one anthrax death, and we are asked the next day for a
billion dollar appropriations to deal with the problem.

And a lot more will be appropriated before it is all over. What about the 40,000 deaths per year on government-run
highways and the needless deaths associated with the foolish and misdirected war on drugs? Why should anyone be
criticized for trying to put this in proper perspective?

Countless groups are now descending on Washington with their Hands out. As usual, as with any disaster, this disaster
is being parlayed into an opportunity, as one former Member of the Congress phrased it. The economic crisis that
started a long time before 9-11 has contributed to the number of those now demanding Federal handouts.

But there is one business that we need not fear will go into a slump: The Washington lobbying industry. Last year, it
spent $1.6 billion lobbying Congress. This year, it will spend much more. The bigger the disaster, the greater the
number of vultures who descend on Washington. When I see this happening, it breaks my heart, because liberty and
America suffers, and it is all done in the name of justice, equality and security.

Emotions are running high in our Nation's capital, and in politics emotions are more powerful tools than reason and the
rule of law. The use of force to serve special interests and help anyone who claims to be in need unfortunately is an
acceptable practice. Obeying the restraints placed in the Constitution is seen as archaic and insensitive to the people's
needs. But far too often the claims of responding to human tragedies are nothing more than politics as usual. While one
group supports bailing out the corporations, another wants to prop up wages and jobs. One group supports
federalizing tens of thousands of airport jobs to increase union membership, while another says we should subsidize
corporate interests and keep the jobs private.

Envy and power drives both sides, the special interests of big business and the demands of the welfare redistributionists.

There are many other reasons to make one sad with all that is Going on today. In spite of the fact that our government
has done such a poor job protecting us and has no intention of changing the policy of meddling overseas, which has
contributed to our problems, the people are more dependent on and more satisfied with government than they have
been in decades, while demanding even more government control and intrusion in their daily lives.

It is aggravating to listen to the daily rhetoric regarding liberty and the Constitution while the same people participate in
their destruction. It is aggravating to see all the money spent and civil liberties abused while the pilot's right to carry
guns in self-defense is denied. It is even more aggravating to see our government rely on foreign AWACS aircraft to
provide security to U.S. territory. A $325 billion military budget, and we cannot even patrol our own shores. This, of
course, is just another sign of how little we are concerned about U.S. sovereignty and how willing we are to submit to
international government.

It is certainly disappointing that our congressional leaders and administration have not considered using letters of
marque and reprisal as an additional tool to root out those who participated in the 9-11 attacks. The difficulty in finding
bin Laden and his supporters make marque and reprisal quite an appropriate option in this effort.

We already hear of plans to install and guarantee the next government of Afghanistan. Getting bin Laden and his gang is
one thing, nation-building is quite another. Some of our trouble in the Middle East started years ago when our CIA put
the Shah in charge of Iran.

It was 25 years before he was overthrown, and the hatred toward America continues to this day. Those who suffer from
our intervention have long memories.

Our support for the less than ethical government of Saudi Arabia, with our troops occupying what most Muslims
consider sacred land, is hardly the way to bring peace to the Middle East. A policy driven by our fear of losing control
over the oil fields in the Middle East has not contributed to American Security. Too many powerful special interests
drive our policy in this region, and this does little to help us preserve security for Americans here at home.

As we bomb Afghanistan, we continue to send foreign aid to feed the people suffering from the war. I strongly doubt if
our food will get them to love us or even be our friends. There is no evidence that the starving receive the food. And
too often it is revealed that it ends up in the hands of the military forces we are fighting. While we bomb Afghanistan and
feed the victims, we lay plans to install the next government and pay for rebuilding the country. Quite possibly, the new
faction we support will be no more trustworthy than the Taliban, to which we sent plenty of aid and weapons in the
1980s. That intervention in Afghanistan did not do much to win reliable friends in the region.

It just may be that Afghanistan would be best managed by several tribal factions, without any strong centralized
government and without any outside influence, certainly not by the U.N. But then again, some claim that the proposed
Western financed pipeline through northern Afghanistan can only happen after a strong centralized pro-Western
government is put in place.

It is both annoying and sad that there is so little interest by anyone in Washington in free market solutions to the world's
economic problems. True private ownership of property without regulation and abusive taxation is a thing of the past.
Few understand how the Federal Reserve monetary policy causes the booms and the busts that, when severe, as now,
only serve to enhance the prestige of the money managers while most politicians and Wall Streeters demand that the
Fed inflate the currency at an even more rapid rate. Today's conditions give license to the politicians to spend our way
out of recession, they hope.

One thing for sure, as a consequence of the recession and the 9-11 tragedy, is that big spending and deficits are alive
and well. Even though we are currently adding to the national debt at the rate of $150 billion per year, most politicians
still claim that Social Security is sound and has not been touched. At least the majority of American citizens are now
wise enough to know better.

There is plenty of reason to feel heartbroken over current events. It is certainly not a surprise or illogical for people
working in Washington to overreact to the anthrax scare. The feelings of despondency are understandable, whether due
to the loss of lives, loss of property, fear of the next attack, or concerned at our own frantic efforts to enhance security
will achieve little. But broken or sad hearts need not break our spirits nor impede our reasoning.

I happen to believe that winning this battle against the current crop of terrorists is quite achievable in a relatively short
period of time. But winning the war over the long term is a much different situation. This cannot be achieved without a
better understanding of the enemy and the geopolitics that drive this war. Even if relative peace is achieved with a battle
victory over Osama bin Laden and his followers, other terrorists will appear from all corners of the world for an
indefinite period of time if we do not understand the issues.

Changing our current foreign policy with wise diplomacy is crucial if we are to really win the war and restore the sense
of tranquility to our land that now seems to be so far in our distant past. Our widespread efforts of peacekeeping and
nation-building will only contribute to the resentment that drives the fanatics. Devotion to internationalism and a
one-world government only exacerbates regional rivalries. Denying that our economic interests drive so much of what
the West does against the East impedes any efforts to diffuse the world crisis that already has a number of Americans
demanding nuclear bombs to be used to achieve victory. A victory based on this type of aggressive policy would be a
hollow victory indeed.

I would like to draw analogy between the drug war and the war against terrorism. In the last 30 years, we have spent
hundreds of billions of dollars on a failed war on drugs. This war has been used as an excuse to attack our liberties and
privacy. It has been an excuse to undermine our financial privacy while promoting illegal searches and seizures with
many innocent people losing their lives and property. Seizure and forfeiture have harmed a great number of innocent
American citizens.

Another result of this unwise war has been the corruption of many law enforcement officials. It is well known that with
the profit incentives so high, we are not even able to keep drugs out of our armed prisons. Making our whole society a
prison would not bring success to this floundering war on drugs. Sinister motives of the profiteers and gangsters, along
with prevailing public ignorance, keeps this futile war going.

Illegal and artificially high priced drugs drive the underworld to produce, sell and profit from this social depravity. Failure
to recognize that drug addiction, like alcoholism, is a disease rather than a crime, encourage the drug warriors in efforts
that have not and will not ever work. We learned the hard way about alcohol prohibition and crime, but we have not yet
seriously considered it in the ongoing drug war.

Corruption associated with the drug dealers is endless. It has involved our police, the military, border guards and the
judicial system. It has affected government policy and our own CIA. The artificially high profits from illegal drugs
provide easy access to funds for rogue groups involved in fighting civil wars throughout the world.

Ironically, opium sales by the Taliban and artificially high prices helped to finance their war against us. In spite of the
incongruity, we rewarded the Taliban this spring with a huge cash payment for promises to eradicate some poppy fields.
Sure.

For the first 140 years of our history, we had essentially no Federal war on drugs, and far fewer problems with drug
addiction and related crimes was a consequence. In the past 30 years, even with the hundreds of millions of dollars
spent on the drug war, little good has come of it. We have vacillated from efforts to stop the drugs at the source to
severely punishing the users, yet nothing has improved.

This war has been behind most big government policy powers of the last 30 years, with continual undermining of our
civil liberties and personal privacy. Those who support the IRS's efforts to collect maximum revenues and root out the
underground economy, have welcomed this intrusion, even if the drug underworld grows in size and influence.

The drug war encourages violence. Government violence against nonviolent users is notorious and has led to the
unnecessary prison overpopulation. Innocent taxpayers are forced to pay for all this so-called justice. Our eradication
project through spraying around the world, from Colombia to Afghanistan, breeds resentment because normal crops
and good land can be severely damaged. Local populations perceive that the efforts and the profiteering remain
somehow beneficial to our own agenda in these various countries.

Drug dealers and drug gangs are a consequence of our unwise approach to drug usage. Many innocent people are
killed in the crossfire by the mob justice that this war generates. But just because the laws are unwise and have had
unintended consequences, no excuses can ever be made for the monster who would kill and maim innocent people for
illegal profits. But as the violent killers are removed from society, reconsideration of our drug laws ought to occur.

A similar approach should be applied to our war on those who would terrorize and kill our people for political reasons.
If the drug laws and the policies that incite hatred against the United States are not clearly understood and, therefore,
never changed, the number of drug criminals and terrorists will only multiply.

Although this unwise war on drugs generates criminal violence, the violence can never be tolerated. Even if repeal of
drug laws would decrease the motivation for drug dealer violence, this can never be an excuse to condone the violence.
On the short term, those who kill must be punished, imprisoned, or killed. Long term though, a better understanding of
how drug laws have unintended consequences is required if we want to significantly improve the situation and actually
reduce the great harms drugs are doing to our society.

The same is true in dealing with those who so passionately hate us that suicide becomes a just and noble cause in their
effort to kill and terrorize us. Without some understanding of what has brought us to the brink of a worldwide conflict in
reconsidering our policies around the globe, we will be no more successful in making our land secure and free than the
drug war has been in removing drug violence from our cities and towns.

Without some understanding why terrorism is directed towards the United States, we may well build a prison for
ourselves with something called homeland security while doing nothing to combat the root causes of terrorism. Let us
hope we figure this out soon. We have promoted a foolish and very expensive domestic war on drugs for more than 30
years. It has done no good whatsoever. I doubt our Republic can survive a 30-year period of trying to figure out how
to win this guerilla war against terrorism. Hopefully, we will all seek the answers in these trying times with an open mind
and understanding.

I don't see any real contradiction with what James McDonald had to say. The point is that there is a lot of oil but at what price? McDonald said that new projects have come online as the POO rises because these projects become economic. He cites the North Sea as an example and ultra-deep water in the Gulf of Mexico as another. I agree with that assessment. He also describes the Athabasca Tar Sands in BC, and the Orinoco Belt sludges (also known as the "faja").

The first thing that one must remember is that the problem is not how much oil is left, but rather how much oil is recoverable, and more importantly, how much is economically recoverable. Secondly, what is perhaps more important is what happens when production no longer increases or worse, tapers off, while demand increases. Thirdly, the question arises whether or not non-conventional oil, alternative energy sources, new technology, and energy conservation measures can make up for the dwindling conventional oil reserves.

I do find it interesting that McDonald does not include Saudi as an Arab member of OPEC for purposes of the discussion. Nevertheless, it was only a 3% decrease in oil supply during the 1973 Arab Oil Embargo that resulted in long gas lines, 55 MPH speed limits, and darkened cities. In 1979 the Iranian Revolution resulted in threatened oil supply and we got to see Jimmy Carter huddled around the fireplace wearing a Cardigan sweater as he addressed the nation about the problems we were facing at the time. Those were "Interesting Times."

Of course if there were a disruption to Arab oil supply we would still see rising POO in the US. In other parts of the world there would be a bidding war for oil - including our oil. Oil companies are businesses - not charities - and they will sell to the highest bidder just as they did in 1973 and 1979. During those times oil tankers from the ME reversed course with full loads toward Europe because the bidding in Amsterdam raised the POO in Europe higher than the US.

As far as are we running out of oil? Not at all. We are running short on "Cheap Oil" and therefore we will see development of previously uneconomic areas and unconventional sources as the POO rises. The Hubbert Peak model still holds. There have been no large "Super-Giant" discoveries in about 30 years. The Caspian Sea discovery appears to be much smaller than expected. Chevron has recently reported that they have encountered several "dry holes." A rising POO will put pressure on the global economy and also act as a cap to any economic recovery until more sources of "cheap Energy" are developed. Once again we live in "Interesting Times." We can always hope that we will squeak by or even better discover some source of "cheap" and abundant energy.

Don't panic, don't worry, don't even be concerned if you hear this or that is about to run out, or this or that country is about to default, or this or that company is going into liquidation and thousands will lose their jobs.

Why? This is the age of Wizardry and America is the home of the Grand Wizard himself. They are re-laying the road to the Fed, you won't miss it, it's to be paved with yellow bricks.

With his magic wand 'he' (should I spell 'he' with a capital out of reverence?) need only tap the ground, and oil will flow ( to keep the price down). He can touch a stone and it will turn to gold (to keep the price down). He can touch toilet paper and it can become a million dollars - in fact millions, and millions of dollars

How do I know? Because I see his magic everyday. It's a fantastic magical world. No need to go to Disneyland, or Disneyworld (no wonder their shares are down) we have the Magic Kingdom in the whole of America.

Just think of it. America already the world's biggest debtor nation embarks on a military escapade costing millions of dollars a day ( probably a minute), and the dollar rises. The world economy is heading for what should be the greatest depression ever - according to sound economic theory - but the financial markets rise, and rise, and rise.

Yes, I have become a believer. Can't wait for the next Harry Potter book to come out, I want to learn all I can about wizardry - it's the present and the future.

The United States should now be prepared for one of the deepest and most intractable recessions of the post-World War II period, with no natural process of recovery in prospect unless a large and complex reorientation of policy occurs both here and in the rest of the world. The grounds for reaching this somber conclusion are that very large structural imbalances, with unique characteristics, have been allowed to develop. These imbalances were always bound to unravel at some stage, and it now looks as though the unraveling is well under way. There may be no spontaneous recovery because the unraveling that has started is a reversion toward what, in the relevant sense, is a normal situation. This consideration leads us to take issue with some distinguished commentators, such as Alan Blinder (2001) and Laura Tyson (2001), who apparently assume that because a spontaneous recovery will occur relatively soon, any fiscal relaxation should be temporary. The general predicament is made worse by a deteriorating world economy; U.S. exports fell sharply in the first seven months of 2001, when the balance of payments was already heavily in deficit.

Black Blade: It does not look good. The fundamentals are deteriorating and that portends a "grim" future.

Now that nearly all economists agree the U.S. economy is in recession, some have moved on to debate where we are in the process. In Churchillian terms, things have probably gone beyond the end of the beginning. Many now believe a recession started during the summer, if not before.

But it's too early to declare this the beginning of the end. The key indicators -- employment, production, profits, incomes - are not only falling, but falling faster than before. Simply put, Americans are now likely in the stomach-churning, confidence-busting, penny-pinching middle of what may turn into the deepest recession in 20 years.

Also indicating a longer, deeper recession in the United States is the fact that economies are also weak almost everywhere else in the world -- the first such simultaneous downturn in nearly 30 years.

Black Blade: This recession will be a long term affair. Silver bugs Warren Buffett and George Soros also seem convinced. I don't see any positive data to even hint at an economic recovery. Prepare for the worst and hope for the best. Get out of debt, have enough cash for expenses for several months, get Gold and Silver portfolio insurance, be very "picky" with any new investments, get started on a storage program for food and basic necessities, and hang on for the ride. At the very least you will sleep better at night. We live in "Interesting Times."

Your suggestion ("that the last two words of the third line of the last verse could be replaced by the single but two syllable word 'unfold'") sounds good to me.

And here is a weekend brain teaser for you.
Which TV comedy series of the 1970's included a character called "Nausius" who was particularly fond of writing odes?

(A clue- Frankie Howerd was in it)

Regards- and herewith the modified version:

Ode to Gold

"From hence, ye beauties, undeceived,
Know, one false step is ne'er retrieved,
And be with caution bold.
Not all that tempts your wandering eyes
And heedless hearts is lawful prize;
Nor all that glisters gold."

Thus spoke Thomas Gray
About a cat that lost its way
In seeking piscine gold
But some men, oh and women too
Seek by paper profits to pursue
And heed not of risk, when they are told

Some brilliant types wrote a formula of power
Then built a financial Babel Tower
Its value derived from paper
They called their enterprise LTCM
But soon the banks had to help them
Or "pffft!" see all turn to vapor

There is a simple "fact" that many "know"
By owning paper promises they think their worth will grow
Meanwhile more debts unfold
Ignoring recession, layoffs, no profits, war threat
Now listen: Gold is gold and no-one's debt
And that's all that should be told

t was, the statisticians tell us, the longest period of uninterrupted economic growth in recorded American history. And now it's just that, history.

Nevertheless, the consensus among academic and corporate economists is pretty clear: The economy has tanked. Business investment, consumer spending and job growth are all falling. Retrenchment will be the theme for the duration of 2001, and probably into the spring of 2002 if not longer.

Diane Powell, of Palo Alto, Calif., says she's also been working steadily to find a job since she lost her position as an analyst at Hewlett Packard in late August. A generous severance package, including sessions at a career center has eased the way. Since she's free of debt, Powell figures that with the $230 weekly unemployment checks, she can make it until February without a job. ``I hope I can find a job before the next wave gets laid off,'' she said. ``It's going to be hard. It's getting kind of scary.''

Black Blade: These are just a few tales of those nonessential "Bones" to be flung upon the "Bone Pile." It is going to get much worse and corporate earnings fall and companies get desperate to shed overpaid employees hired during the "Go-Go 1990's Tech and Dot.Com booms. Now we see the rank and file of the US workforce cast aside as the economy begins to crash. In a word - "GRIM"

http://216.46.231.211/credit.htm"Want to see where He lives? Just follow the Yellow Brick Road" Of course, as the merry parade heads off to follow the Wizard's coattails, some of us lag bashfully behind until the parade is out of sight, and start to edge on over to see what those Yellow Bricks are made of, and consider just how many of them we can pick up, and cart home.

Mostly through Noland's piece, and following FOA's "buy all debt" posting last night, I'm guessing that M.A.D. will no longer be Mutually Assured Destruction, but "Monetize All Debt."

However, as always, it will be Who You Know, as to whether your debt gets bought. It's always been that with the Third World sovereign loans gone bad, Citi or whoever has their In at Treasury. These partnerships of Big Lender and Big Borrower (in our homeland, are they really different parties?) always lobby to get the money out of the naive "guy behind the tree."

Come to think of it, homeowners now better start organizing "Home Protection Lobbies" or the like, with some kind of permitted write-down of mortgage balances as the goal.

I've always preferred the mortgage tax deduction be a 15% credit instead. Gov could make it refundable to help out with payments, and equalize the benefit across the board.

Another two US planes shot down, and this time 50 US troops dead claim the Taliban. Of course America denies it but say they lost a chopper.

Lies and counter lies.. guess we just have to go somewhere between, multiply by two and divide by three, then square it.
I pass the following on because I have the feeling not all is shown on US TV.

Our 'man (BBC)in Afghanistan was giving his daily bulletin from the Northern Alliance position right at the front line.

You could see the Taliban front line just a few yards away almost near enough to shout to each other, but they use their mobile phones to talk to each other, which they do continually.

Our man gave a translation of what the Alliance fighter was telling him. He was pointing out a man in a white coat, or whatever, and said that he was the main commander for the area.

The man was walking around quite openly. The Alliance fighter said 'We could shoot him easily,(which had ocurred to me the moment I saw him) but we have a rule of live and let live - 'live and let live'???

Well, if you are wondering what sort of a war this is, I don't blame you. I don't think anyone knows. Both sides Afghans) are laughing their heads off. Only the Americans have serious faces. (And if I were a US soldier, I would have a serious face too. That friendly face who smiles at you because you think he is a 'friendly' on your side, could be tipping off the other side of your movements)

http://www.yardeni.com/public/shoild_c.pdfThe main reason for the initial oil crisis was not the 3% cut back in production, though it had a significant effect in bringing us a little up the supply demand curve. The main reason was, as our dear Gilded opinion writer Antal Fekete noted: monetary. People were hoarding. They borrowed dollars, bought "stuff" with it, and did not consume it. They bought it in a panic thinking that there would never be more. The media were flooded with Malthusian projections of a booming demand and declining supply.

Not since the Nazis has a propaganda campaign been so successful. During this time, EXCESS monetary supply of dollars and the elimination of the gold exchange tether on it went up to levels of 4% (up to and monetary Excess of 10% of GDP) and more, on top of the decades of the 40s through the 60s when the war debt was monetized. As I had explained here for some 2 years, fiat debt money loses value by dilution when it expands in volume outstanding, and loses value during falls in volumes because of debt defaults eliminating the demand for the existing monetary base (for debt payments). This condition of monetary expansion drives the phenomenon of the "crack up boom" of hoarding, and the general rise in prices: the accelerating decline of the purchasing power of the monetary unit denominating the debt.

In the URL above, on pg 16 we see that global oil output rose from about 51-2 mil bbl per day in 75 to peak at 64 mil bbl in 1980. The bulk of the rise in output occurred in 1976. Does anyone with a claim on sanity suggest that the world learned how to consume 10 mil bbl/day more oil in all of a single year? or had it more to do with a response to the money printing rampage of the US gov (including the Fed) that increased the debt creation rate from single to double digits and caused hoarding?

Some claim that the oil consumption spike then was a rebound from reduced oil consumption following the 1974 production cuts, yet non OPEC oil production had already started up (page 17 at the URL above) and oil prices had already gone up before that (in line with general prices), and rose only to the point of matching some (not all) of the rise in the other main energy source of the time, coal, which is much easier to accumulate.

To further indicate that the initial "oil shock" was merely a monetary issue, we should consider that after the 1976 rise in output (most of the extra rise accumulated), oil output and consumption did not rise much till after the Shah's fall, when sheer panic ensued. Aristottle captured the hoarding that went on during that time very well. Enough hoarding so that needed oil output at the bottom of the next recession in 1982 was under 49 mil. bbl per day, even lower than it was at the start of the "crisis", and did not reach back to the peak levels of 76-79 till 1995.

Had there actually been an oil crisis rather than a monetary crisis, then one would have expected oil prices to remain high relative to other things over time, they did not. Hence, the crisis was artificial from a structural economic point of view, and was essentially a monetary driven hoarding and a politically motivated panic. For an example of an actual shock, look at natural gas. The price reaction to the shortage (largely a creation of California's pricing and regulatory scheme) and the reaction to the prices was much healthier than anything we saw in the 70s, though the scale of the price rise in nat gas was equal to the whole of the 1970s "oil crisis".

For any who consider seriously FOA's remarks that "political will trumps economic theory every time", understand that it is the sound of frustration in the mouths of politicians who's actions backfired and not produced the desired loot for them and their cronies. I guess tha FOA could not come to terms with Mises' theory because it tells him that either his people act fairly and fail, or act as imperial thieves and thugs, to achieve just a fraction of their hoped for payout. If he read Mises of late, he would have noticed that the ECB already made too many mistakes and has not positioned itself to become what FOA claimed it wants to be. The structurally hobbled EMU finance system, hobbled by the dominance of banking institutions maintaining market share by undercutting market interest rates, will not allow the ECB as much lattitude as the Fed has.

Perhaps some of the political agenda that could make possible a selective drop in US dollar values without affecting the euro will materialize - like taxes on gold mining - capital controls, etc.. Perhaps Congress will manage to damage corporate profitability as thoroughly as the European Parliament and member governments have done already. If they do, then the credit quality and value of much of the US financial markets would evaporate, along with dollar demand, but these damaging legislations have not yet come to pass.

In controling price inflation, it is imperative to allow the market to lower the purchasing power of financial assets as a whole when output falls during a recession. In a bank dominated financial system, the bulk of financial assets are fixed denomination balances at banks, thus the only way to lower the purchasing power of financial assets is to either lower the value of the monetary unit (release pent up price inflation) or have banks go into default without government bailing out the depositors. The US financial system is more stable due to the floating value of financial assets (bonds, commercial paper, equities make up 80% of US financial assets) which simply fall when recession comes, as risk premiums on commercial/consumer debt and on equities rise substantially, lowering their monetary value and thus the purchasing power of financial assets. Europe, where only recently the stock market rose to high enough a level so as to lower bank's share of financial assets from over 55% (compared to under 20% in the US) to 45%, will necessarily deflate with more violence than the floating value market in the US.

Having inflated the euro monetary base for years without having substantial debt demand to balance it, why does anyone think that creating deflationary conditions in Europe would actually help the ECB control prices? If the US structural income balance of payments deficit was so bad, why should the same imbalance with the EMU, but on a greater scale actually get the euro any more respect than it would the dollar?

The #1 CB Manipulator in the World: BoE! The Bank's of England's second core purpose is to maintain the stability of the financial system

http://www.bankofengland.co.uk/Links/setframe.html"The Bank's second core purpose is to maintain the stability of the financial system, both domestic and international.
BR-So what's it's first purpose�I know to protect the member banksters just like all of the other CB's, except they do more manipulations than any of the the other CB's.

"The Bank seeks to achieve through monitoring developments in the financial system both at home and abroad, including the links between individual institutions and between financial markets; and through analysing the health of the domestic and international economy; through close co-operation with financial supervisors both domestically and internationally; and through promoting sound financial infrastructure, including efficient payment and settlement arrangements."

BR-The BoE interest rate still hovers at 5% with all of the inflation and unemployment symptomatic of the struggling world economy. It is obvious that the BoE does not think that interest rates have anything to do with their sagging economy as the rumor is they may raise to 5.25%.

Most of their report has to do with problems within the U.S. (there is nothing wrong with the U.K. of course) and little to do with Gold.

The UK has been one of the sellers of physical Gold in order to keep Gold volatility in line.

"Their official goals are:

stability of the monetary system

financial system infrastructure

broad overview of the system as a whole

being able in exceptional circumstances to undertake

official financial operations (BR-Manipulate for their benefit)the efficiency and effectiveness of the financial sector, with particular regard to international competitiveness."

BR-As far as derivative activities, the UK leads the race:

Average daily turnover in OTC currency and interest rate derivatives was $275bn, 61% higher than the $171bn recorded by the previous survey in April 1998.

This was driven by an increase in OTC interest rate swap business, and reflects the increasing importance of swaps as a trading and pricing benchmark.

According to the BIS statistics the UK's Bank of England handles more derivatives than any other country some $504BB per day.Their balance sheet shows assets of 812,179 Euros MM with Liabilities of 802,196: a very thin surplus with SWAPS occupying over 60% of the total risk.

My, my�And to think that somehow these manipulators will find someway to blame the Fed for these derivative investments. Could it be possible that the BoE has decided to hedge their bets because of carrying a higher than normal risk in their system?

Their link to the latest BIS statistics shows little change since I posted their #1 derivative ranking over a month ago.

In reference to Gold holdings, the BoE has reduced their assets from $1,021MM have been reduced to $839MM in the last year.

"Bank of England holdings of foreign currency and gold are marked to market using end-period market prices and exchange rates."

This seems an awfully low figure for such a major country. But I think that it is safe to say, that the BoE does not have more use for the metal than any other CB. But they sure know how to gamble on derivatives.

There has been a "serious explosion" in a car in a city centre street, police said.
Police were called to Smallbrook in Kingsway, Birmingham, after the car exploded at 2230 GMT on Saturday.
The incident happened close to the city's main New Street railway station.
No-one was injured and police inquiries are under way.
More soon.

Why?
This one, in a nutshell, beautifully summarizes 30+ years of gold thinking and history. It then gives a cogent view of the current and the dynamics that will shape the near future for gold. It's out there, weighing on us, like a tonne of yellow metal.

Crude oil pricing is cyclical and often fluctuates with world events. There have been numerous attempts to manipulate and control petroleum prices. Since 1869 US crude oil prices adjusted for inflation have averaged $18.63 per barrel. Oil is critical to the US economy. Without oil the economy suffers and the result is economic turmoil as in 1973 and 1979. Every postwar recession has been preceded by an energy crisis. In the Pre Embargo Period of 1973 Crude Oil prices ranged between $2.50 and $3.00 from 1948 through the end of the 1960s.

The price of oil rose from $2.50 in 1948 to about $3.00 in 1957. When viewed in 1996 dollars an entirely different story emerges. In 1996 dollars crude oil prices fluctuated between $14 - $16 during the same period. The price increases apparently were just keeping up with inflation. From 1958 to 1970 prices were stable at about $3.00 per barrel, but in real terms the price of crude oil declined from above $15 to below $12 per barrel (again in 1996 adjusted dollars). The decline in the price of crude when adjusted for inflation was further exacerbated in 1971 and 1972 by the weakness of the US dollar.

A consortium or cartel was formed in 1960 with five founding oil producer members: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. OPEC (Oil Producing and Exporting Countries) was born! By the end of 1971 six other nations had joined the group: Qatar, Indonesia, Libya, United Arab Emirates, Algeria and Nigeria. These nations had experienced declining prices for their product. During the post war period petroleum exporting countries found that demand for their crude oil had increased and yet there was a 40% decline in the purchasing power of a barrel of crude.

In March 1971, the balance of power shifted. That month the Texas Railroad Commission set proration at 100 percent for the first time. This meant that Texas producers were no longer limited in the amount of oil that they could produce. I believe that FOA had touched on this long ago. This meant that US oil producers lost pricing control to OPEC.

Now the fun began. In 1973 the World saw the Yom Kippur War - Arab Oil Embargo take place. In 1972 the price of crude oil was about $3.00 and by the end of 1974 the price of oil had quadrupled to $12.00. The Yom Kippur War started with an attack on Israel by Syria and Egypt on October 5, 1973. The United States and many other countries had interfered in the politic of the Middle East and gave support to Israel. As a result of this support Arab exporting nations imposed an embargo on the nations supporting Israel (not merely a cut in production or embargo against the US as ORO asserts). Arab nations curtailed production by 5 million barrels per day (MMBPD) about 1 MMBPD was made up by increased production on other countries. The net loss of 4 MMBPD extended through March of 1974 and represented 7 percent of the free-world production. The US and other World producers were caught with their pants down around their ankles. They simply could not make up the shortfall and a bidding war erupted for available oil.

If there was any doubt that the ability to control crude oil prices had passed from the US to OPEC it was removed during the Arab Oil Embargo. The free market response sent petroleum up over 400 percent in six short months. Yes ORO, it was a shortage! From 1974 to 1978 crude oil prices increased at a moderate pace from $12 per barrel to $14 per barrel. When adjusted for inflation the prices were constant over this period of time. Remember now, since 1869 US crude oil prices adjusted for inflation have averaged $18.63 per barrel. Why the decline? There was incentive to explore and produce more oil - the Free Market is just funny that way.

Events in Iran and Iraq led to another round of crude oil price increases in 1979 and 1980. The Iranian revolution resulted in the loss of 2 to 2.5 million barrels of oil per day between November of 1978 and June of 1979. In 1980 Iraq's crude oil production fell 2.7 MMBPD and Iran's production by 600,000 barrels per day during the Iran/Iraq War. The combination of these two events resulted in crude oil prices more than doubling from $14 in 1978 to $35 per barrel in 1981. Yes ORO, this too was a shortage! After a time the price of oil retracted again. Gee Whiz! There's that Free Market response with more exploration and production catching up with demand. Funny how that works.

There were some other problems during this period as well. One was Dick Nixon's Oil Price Controls. The rapid increase in crude prices during this period would have been much less were it not for United States energy policy during the post Embargo period. The US imposed price controls on domestically produced oil in an attempt to lessen the impact of the 1973-74 price increase. The obvious result of the price controls was that U.S. consumers of crude oil paid 48 percent more for imports than domestic production.

In the short term the effects of the recession induced by the 1973-1974 crude oil price rise was less. However, it had other effects as well. In the absence of price controls U.S. exploration and production would certainly have been significantly greater. The higher prices faced by consumers would have resulted in lower rates of consumption. The United States would have been less dependent on imports in 1979-1980 and the price increase in response to Iranian and Iraqi supply interruptions would have been significantly less.

OPEC's has rarely been effective as a cartel. During the 1979-1980 period of rapidly increasing prices, Saudi Arabia's oil minister Ahmed Yamani repeatedly warned other members of OPEC that high prices would lead to a reduced demand. Higher prices eventually lead to more exploration and production offshore and greater conservation in the US. From 1982 to 1985 OPEC attempted to set production quotas low enough to stabilize prices. These attempts failed as several members of OPEC would cheat on their quotas and over produce. During most of this period Saudi Arabia acted as the swing producer cutting its production to stem the free falling prices. In August of 1985, the Saudis had enough and they punished the cheaters by linking their oil prices to the spot market for crude and by early 1986 increased production from 2 MMBPD to 5 MMBPD. Crude oil prices plummeted below $10 per barrel by mid year.

There was a spike in prices of crude oil in 1990 with the uncertainty associated Iraqi invasion of Kuwait and the ensuing Gulf War, but following the war crude oil prices entered a steady decline until in 1994 inflation adjusted prices attained their lowest level since 1973. Eventually with a strong US economy and increased Third World demand prices recovered into 1997 In December, OPEC increased its quotas 10 percent to 27.5 MMBPD but the rapid growth in Asian economies had come to a screeching halt - the Asian Contagion.

More recently the US experienced another energy crisis as the increase in demand, much of it due to the booming High Technology boom and heightened economic activity. The problem of course was that no one thought about increasing petroleum production to match the increased demand. The energy grid is toast, there were not enough power generating facilities, not enough pipeline capacity, not enough drill rigs to match increasing demand, misguided environmental ideals, and NIMBY. Add in the occasional drought reducing hydroelectric power and the result is a power shortage - oops! There's that word again. Yes ORO a shortage of available energy. Another "Energy Crisis."

http://news.bbc.co.uk/hi/english/uk/england/newsid_1636000/1636919.stmI may have been too quick in
The Invisible Hand (11/3/01; 18:42:37MT - usagold.com msg#: 64632)
to link the bombing to bin Laden, but here's what Chief Inspector Ellie Bird, of West Midlands Police, said, after blaming some Irish nationalists: "It cannot and should not be connected with the incidents in America on 11 September."

My poor english and lack of superlatives are reasons, for not being able, to praise the * very profound content *, of your latest message ! Brilliant and outstanding ! Radically to the point, without any doubt. Many thanks, again, for communicating, amically, what many other simply don't dare to conclude, for obvious reasons. Wish you health and happiness as to pay humbly for my enormous debt to you.

Why MSG #128? a tough choice, a bit like choosing from the menu of a fine establishment. The last 30 days have carried some important messages from 'The Trail' but in the end the fairly recent 128 carried the day; ". . . some form of freely priced barter gold is now firmly on the road to becoming a real competition for use in world wide trade . . . " Forget Argentina and forget the derivatives for the moment (if you can!), this will be "really" big in retrospect. . . Jan 1st 2002 IS the dawning of a very new day. It wouldn't be complete without some snippets from the master trail guide #128 (smile) - Netking
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". . . using gold to partially settle world wide oil trades would bring more balance into this one-sided dollar economic world. Trade alignments, such as gold for grain, grain for copper, copper for oil, then oil for gold would easily be adapted into our current solo dollar realm; forcing the dollar to share it's fiat use demand with real barter trade for real goods . . . "

". . . Where official dollar supporters have structured our paper gold market in a way that values gold only upon it's money backing merits; a returning of gold into it's barter trade realm would force a realignment of values between physical and paper. Once again allowing gold's value to soar and creating a large enough liquidity mass to serve not only as an oil trading medium, but wealth savings for all. . . "

". . . Not only Euros, but some form of freely priced barter gold is now firmly on the road to becoming a real competition for use in world wide trade. Within this evolution, the currency trade settlement game is being slowly switched from virtual to real time as the act of slowly accumulating gold over a long transition period is drawing to a close. . . "

". . . The coming inflationary fire will now sever the wealth our reserve dollar system created for all of us Americans. In the same scope of time a, Euro based, free gold price will evolve out of these inflation fires. I for one do not relish this outcome, but welcome the good such a staunch reality will infuse into our national values. . ."

". . .Gold must rise in value many many times just to regain it's wealth barter asset value. Perhaps $10,000 to start. Then, it will run with any and all dollar inflation,,,,, even Euro inflation that ECB people openly admit must be a part of a dollar to Euro transition. . . "

". . .The EuroLand Central Banks have every bit of gold in their vaults their accounts say they do. For that matter, so does the USA (for now!). . ."
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Thanks Trail Guide - regards Netking.

http://www.iran-press-service.com/articles_2001/nov_2001/iran_backing_taleban_31101.htmFrom the 'Iran press service'(FWIW)- Snippet:
TEHRAN 3 Nov. (IPS) Iran has decided to help both the afghan ruling Taleban regime against the United States and the "Al-Qa�eda" organisation to mount new terrorist operations aimed at the US and British forces stationed in the Persian Gulf, informed sources with access to the Revolutionary Guards intelligence said Friday.

According to the source, Iran has sent to Afghanistan some 1.500 men, "fully equipped", drawn from the Revolutionary guards elite "Al-Qods" force to Afghanistan, mixed with Afghans militias belonging to Mr. Golboddin Hekmatyar, an unpopular Afghan warlord who lives in Iran . . . "

Gold, since the beginning of history, has been considered money and in our generation especially it was considered a necessary component of a well hedged portfolio designed to withstand uncertain economic storms. That concept has been challenged these past few years. But while the Western Culture has spurned gold other prominent banking financial interests around the globe are giving gold respect & consideration.

This past summer a seminar was planned by a group of Islamic countries including representatives from the Islamic banking sector to look into the feasibility of creating an Islamic World Currency based on gold & silver coinage: the Dinar & Dirham. The Institute of Islamic Banking & Insurance

"The Islamic Dinar is a specific weight of gold equivalent to 4.3 grammes. The Islamic Dirham is a specific weight of silver equivalent to 3.0 grammes." The World Islamic Trading Organization

"The crash of the current financial system is inevitable�The only people who won't lose everything are those who have turned their stocks, bonds, savings and other investments into real and tangible assets like gold and land�The reality is that when trading on the stock market is suspended and share prices have hit zero history will repeat itself and Muslims will be left holding worthless bits of paper called share certificates to match the other worthless bits of paper called money or bank notes." Muslim Open Trade Network

"If we do not use US dollars, we do not need to peg ringgit with dollars," Finance Minister Datuk Seri Dr. Mahathir Mohamad

"The Islam Today Working Weekend saw the first public demonstration of the "e-Dinar" digital currency (an ATM type debit card, but backed by gold), a key new facility which takes advantage of the most recent advances in Internet based commercial transacting and which has the potential to greatly accelerate the development of the Dinar and the Dirham into a world-wide medium of exchange and payment" M. O. T. N.

"A network of Wakalas integrated by the e-Dinar will form the operational core of the Islamic money system and will eventually enable it to function entirely independently of the current (US) banking system. The Wakala network will operate a worldwide Dinar account and payment system which is 100% gold backed. The Islamic Wakala of Dubai has been established as the first clearing house and main gold deposit for the entire network." M. O. T. N.

The Western version to the e-Dinar card is e-gold, GoldGrams, Standard Reserve (a more traditional debit card & can be used in ATM machines), GoldMoney.com, & MetalSavings (will pay interest on deposits). All of these electronic payment systems are 100% backed by gold. "The digital gold community is expanding rapidly�There are now more people than ever using digital Gold�"

Most within the Western Banking Culture lack the courage to consider any alternative to the present fiat (paper) monetary system. This lack of objectivity and understanding "�only promotes a narrow-mindedness and an absurd conceit, based on utter ignorance�an intolerant egotism." V. M. Hillyer Calvert School, 1924

What is the history of gold and what are its contributions to humanity?

"Possession of this bright yellow metal has been a mark of wealth for thousands of years�During the Middle Ages, a whole science called alchemy grew up around mans efforts to make gold by artificial means." The World Book Encyclopedia 1964. The science of alchemy was abandoned when men realized the same thing could be accomplished through the invention of the "bank": value and wealth created out of nothing. END

Comment: On another note, Reg Howe and GATA put down their wild card in Boston Court action tomorrow. May it hold trump!

As you intimated, the real price of oil had dropped considerably with growing use from the 50s to the 1973 bottom after going up in the late 40s (actually all of the price rise was in 1947). On my crude to goods indices, this is a change from 0.12 to 0.17 in 1947, and a gradual fall till the bottom at 0.12 (of course).

The embargo was indeed against many countries, not only the US. But its effect was not so much in cutting supply so much as it was in exacerbating a problem already present: namely the hoarding of oil, processed oil products, and of oil substitutes, which had been motivated by monetary factors rather than by any particular expectation of a shortage of oil, or a cut in supply.

Yes, pricing control on the supply side had moved into Saudi hands as the swing producer. Yes, the cut in production led to a climb up the price/volume curve. Yes, the Nixonian price controls (ugh!, and he was a Republican) did prevent new supply from coming to market by preventing investment. Yes, fear of some furthur future supply curtailment was a factor in hoarding even in the initial embargo.

But NO, the MAIN factor was monetary, as it was the main factor bringing to the formation of OPEC in the first place: the losses in purchasing power of their revenue from fixed price contracts.

Burns, as did his predecessors, monetized anything and everything. He kept short rates sufficiently low for it to be profitable to hold excess inventory against borrowed money because Burn's artificially low rates were well below the rate of price rises. Average real Fed funds rates were: 1971-80 -0.01%, 1974-80 -0.77%. Furthermore, for the period 1969-1981 it was profitable to hold practically any energy related commodity in inventory even if your financing cost was at prime rather than Fed funds (essentially the cap on how much a bank would offer you at the time, and therefore the opportunity cost associated with the cash used for inventory buildup) but for the two years 1972 and 1976.

That was on a much greater scale than the supply shocks. Why? Because it worked against the fundumental market mechanism for retrieving inventory in times of shortage, thus making it impossible to motivate supply to the market from existing inventory, and making growing inventory at a time of shortage an attractive (extremely attractive) proposition. The Fed's policy prevented supply and demand from converging at the relative price one would expect by going up the relative price/volume statistic. Beyond that, it made holding reserves in the ground more attractive than pumping them out, while making exploration for reserves very attractive.

That is why I consider the "oil crises" mainly a monetary issue. So far, Greenspan has not fallen into this trap, and through the whole of his term he has avoided lowering rates to near 0 real rates while energy prices were rising. He only brought rates down to average 1% real rates during the 1990-93 period when these prices were dropping 9% per year for oil, and 1/2% for NG and coal.

Msg one , two, three is re-explaining the intricacies of our present gold market.
Its conclusion leaves the reader with no doubt as to where we're heading
"Next talk is about inflation, titled: ---- "Forget deflation! The deflation theorist are losing their wealth fast enough for all of us!" �"
thereby announcing msg 129 Nevertheless, as one, two, three lays the foundations of the market or rather expands on the foundations given in
- FOA's 8/10/98 message to MK, on how the gold market works,
and in
- the more than 30 days old msg 106 of the Gold Trail where the structural inflationary trend of the dollar was outlined,
I consider one, two, three, it's as easy as that, to be the best of the Gold Trail.

8/10/98 Friend of ANOTHER

(Editor's Note: Please read what's below carefully. This is an extraordinary analysis from the Friend of ANOTHER at a time of much confusion and uncertaintly in investment/currency markets. We are told at the outset that the largest pro-gold groups -- the Europeans and the Gulf states -- want a world currency "not subject to the performance of the American economy." In other words, a currency not tied to American treasury obligations, or the percpicacity of any other nation for that matter. That currency for those of us who have reached for the deeper truths of economy is called gold. As an American, I must say that I have never seen the concept of American hegemony explained in quite the same way before. Perhaps, my eyes were closed. I keep getting this feeling that Americans must necessarily begin to understand a new role for this country in a rapidly changing international political and economic environment -- a role for which our political and economic institutions appear ill-prepared. I will not be so presumptuous as to explain what the Friend of ANOTHER is saying, I will let you read for yourself. I do not think it could be said any better than Friend of ANOTHER says it. The fact that his analysis implies how one should design one's portfolio is a happy side benefit.)

Michael Kosares,

It has taken some time to send this, but now I can also offer my thoughts to your questions.

Your statement: "As a matter of long term policy, do you believe that ECB will "sell" gold to defend the Euro or "buy" gold to defend the Euro? Each of course would entail a different course of action with respect to reserves of the new national bank. Along these lines,will ECB buy gold from its member treasuries, or will it simply force them to transfer it to ECB coffers if needed to defend the Euro? I am prompted to ask this question in view of your assertion that there will be much selling of Euros to defend the dollar. If the Euro, as you suggested, is being printed to buy dollars isn't this just another manifestation of the U.S. exporting its inflation? It appears to me that the Euro will need to be defended -- and not with dollars -- but with gold! "

Michael, I believe the most difficult part in understanding the modern gold market is overcome by seeing all the various political factions involved. Essentially and basically, the largest pro gold groups are those who want a world currency that is not subject to the performance of the American economy. At this moment and in this period of economic history, all currency reserves held by foreigners (non-Americans) is a debt of the US Government and by extenuation through tax collection, a debt based on the ability of the American economy to function profitability!

In essence, America has told the world that as long as the business of this country is functioning, your wealth, as represented in Marks, Yen, Pesos, etc. is backed with performing US debt. It's like saying, "as long as your neighbor, next door, does not loses his job, you will not lose all your money! Most people would be surprised at how clear this is, outside the USA sphere of influence. This, the largest of the pro gold group, is largely made up of countries with economies that have no need to sell most of their production to the US. The business of these communities would not totally fail without the American engine. Yes, they would slow down, but not collapse, as trade with other countries would continue. To add what was said before: If your neighbor loses his job, you can still trade with the other people in the town, as long as the currency system is not based on your neighbors debts!

This group, made up of much of Europe and the Middle East, is not looking for a return to the old Gold Standard, but perhaps something far better. They do not see any advantage in holding the currency bonds of one country, as a reserve asset of future payment, over holding physical gold as a reserve asset in full payment. The fact that the debt reserve asset pays interest is little more than a joke in these banking circles. Any paper currency, the dollar included, can fall in exchange value against your local currency far more than the interest received! In today's paper markets, the only true value in exchange reserves, held by a government as currency backing, is found in it's effectiveness for defending the local currency from falling against other currencies. In other words, use the reserves to buy your countries money. But, this is a self defeating action as sooner or later the reserves are used up! This fact is not lost on many, many countries around the world, as they watch their currencies plunge, lacking reserves as defense. Ask them how important the factor of earning interest on reserves is under these conditions.

On the other hand, buying gold on the open market, using your local currency, works as a far different dynamic from selling foreign bond\reserves. This action takes physical gold off the market, and in doing so increases it's value in dollar terms. Gold is and always has been the chief competitor with the dollar for exchange reserve status. The advantage here comes from the fact that governments do not run out of local currencies to use in buying gold, as opposed to selling foreign currency reserves to buy the local currency on the open market. Of course, the local price of gold goes sky high, however, in this action you are seen as taking in reserves, not selling them off.

Also, as gold begins to rise against the dollar, the local gold reserves are seen as assets of increasing value, backing the local currency. Under these conditions, with a stable currency, citizens will purchase more gold as it is seen as a positive asset. Not unlike a rising stock, everyone wants an increasing investment. Contrast this action against that in Korea, where everyone sold gold as it increased in an unstable currency!

Basically, this is the direction the Euro group is taking us. This concept was born with little regard for the economic health of Europe. In the future, any countries money or economy can totally fail and the world currency operation will continue. What is being built is a new currency system, built on a world market price for gold. Michael, you are absolutely correct in that the USA will see a hyper inflation of it's currency and a gold price in dollars that reflects it. Unfortunately, for most investors, the gold price rise will be sudden and also hyper fast. as it will occur just after a rapid plunge in dollar based assets including, stocks, debt and the entire banking system. This action will destroy virtually all gold based paper assets as they are also dependent on a functioning economic system. A local gold mine, in any country, must sell production to realize a profit. The contract system they deal with will not be functioning during this time. Contrary to many hopeful investor, local treasury officials will not allow miners to pay employees or buy equipment with physical gold. When the dust does clear for mining to continue, gold will be recognized worldwide as real money, and the mining of money will, no doubt, carry Extreme taxation. Stock prices of these operations, after being priced to zero, will then double or triple in price. Zero times three equals?

Back to your original question. The Euro will not replace gold, it will evolve into a gold transactional currency. It will also price Euro gold very high, perhaps $6,000 in current dollar terms buying power. However, in actual dollar terms of the future, $30,000 US will reflect the American debt as the negative reserve asset it truly is. The ECB will have an easy time issuing Euros to buy gold from the member banks. The real political warfare will be in trying to force them to sell the gold at all, once this ball starts rolling. The Euro has, in effect already been dispersed in the form of Gold Leases not gold sales. One has only to look at the official gold holdings of most central banks to see that physical gold sales are little more than the average, with a good amount of that coming from nonEuro countries. Gold is a funny thing, it can be sold many times and pass through many countries and still remain in a CB vault. Truth Be told, some 14,000 metric/ton have been sold this way. Far more than the street thinks. Using this amount it's easy to see how certain entities have moved off the dollar standard in the last few years. If we use a future price of $6,000+US, the move is about complete.

The process: An oil country (or others) goes to London and purchases one tonn of gold from a Bullion Bank. The BB borrowed this gold from the CB (leased). The one tonn gold certificate is transferred to the new owner. The gold stays in the CB vault and the owner goes home. The CB leased this gold to the BB and expects it to be returned plus interest. The BB financed the Actual Purchase of this gold mortgaging assets of the buyer. The BB, who created the loan, then uses the cash arranged in this venture to contract with a mining company (or anyone wanting a gold/cross financing deal) to purchase production gold, using this cash to pay for it. In the eyes of the mining company, the BB just sold gold on the open market, for cash, and will purchase future production at the contracted price. The mine does not know where the gold came from, only that it was sold and a fixed cash price is waiting. Of course, most of this made more sense when gold was higher. There were thousands of these deals, structured in every possible fashion. Look to the volume on LBMA and you see where the future reserve currency is traded today!

Now when we look at this picture, who is at risk here? The Euro CB Group still holds the physical gold and will buy it back from the new owners, if asked, using printed Euros. The new gold owner has just replaced his dollar reserves with either bargain priced gold, or Euros at an exchange rate never to be seen again! Some of this was done to buy the pricing of oil in Euros. The BB owe the CBs 14,000 tons of gold that they must collect inthe future from producers or currency speculators. And they must collect it by paying what will be a, then, ridiculous price of $300/$400US, while the world market price will be, well, a little higher.

With Canada, Australia, and perhaps England having sold much gold to hold US$, much of the English speaking, IMF/dollar world is about to change. Any country, Japan, Mexico, etc., that has locked their future by selling most of their production to the American economy , is headed for a depression. Another is answering some of your mail questions and is also sending a letter. Will send it on arrival.

@ Invisible : The probability of another Al Qeada crime is very, very, low ! Martyrdom is a passive activity that must be cultivated as such. This (logic) is in sharp contrast with the alarmist atmosphere that is created. Inclusive the prolonged uncertainty (and false alarms) on anthrax.
Very little seems what it is, as usual.

@ JB : #64615 Ron Paul. Very Precious speech but a lonely cry into the dark, I'm afraid. But nevertheless, I would rather like to fly with unarmed pilots, the european way.
Thanks for posting.

Price Inflation (panda-wizardry) in Europ :
Cost of living indicators (the official ones) are blatantly falsified and quietly accepted by everyone. There is no talk about infla/defla-lala, at present. All efforts are concentrated on the management of a stable standard of living for the broadiest population. This management is a very complex enterprise. Apart from falsified inflation (permanent depreciation) indicators, there is that mighty weapon of Taxing-power and re-distribution. Cheap imports are offsetting increasing prices of local produced goods and services. Purchasing power is broadly distributed through re-distribution (welfare) and avoids price-setting by the dominant strong.

The POO-spike to 34$ was an external, disturbing shock.
Temporary adsorbed by Tax refundment and lucky decline of the crude price, just in time. The management of stable (rising) prices survived that shock. A perfect example how the Tax Power and re-distribution, is a very powerfull tool in the european economic management.

Opening and expanding the european community from 300 million to 500 million citizens is having a price containing effect for the richer parts in the EMU, due to the fact that production costs and wages in the poorer parts, are slowly adjusting to the higher price regions in a competitive way. They are working harder for the same euro, for the time being.

At present, the only external (price) shock for Europ lies in the dollar and its appreciation by crude oil. The european individual is not stockmarket dependant as his US counterpart. Interest rates on savings (!) are more important for consumer's spending behavior. Higher IRs, tend to flow to more consumption, heavely taxed of course.

What I'm suggesting is that europ is better buffered against the systemic permanent depreciation with its different speeds. And it is the dollar as widespread global reserve currency that will decide from where an eventual shock will come. Crude oil is imvho the most dangerous crusader by now.

In two of my posts I have talked about wizards. As you realised (you did didn't you?) that this was cynical tongue in cheek stuff.

All of you who ever watched "The Wizard of OZ" (and that surely must be all of you), know that there was really no wizard, it was just a mere mortal hiding behind a 'voice booming' facade.

Very soon we will see behind our wizard's facade. He has served his purpose, and let me make this clear - his purpose was NEVER that of the United States. Have you got that NEVER!. He serves another master, a master that will use the US just as long as there is life in the old dog. Once that life blood ebbs, it's on to pastures green (mixed metaphors? sorry, but you get the drift).

You will find before this time next year (if we are still alive) that he will have left his exalted seat under a ' long awaited retirement', or perhaps real, or fiend heart attack, or some other ill health problem.

Whatever the reason, or time, it will be before the full load of sh*t hits the fan. And, gold, IMHO, will do little BEFORE that time.

The economic typhoon (highest scale ever to be recorded) we are entering has nothing whatever to do with Bin Laden or Sept11th. Our course was set years ago. The devastation that will be wreaked upon the world has been known for years by those that set this course to serve their own ends. (and if you haven't figured out why it was done, and how they have used it - shame)

Over these years, to move our focus away from the real perpetrators, manipulators, call them what you will, we have been fed a diet of media and movie propaganda much disguised as 'entertainment', so we have 'consumed' it unwittingly, and passively like, cigarette smoke in a Bangkok night club.

Like Frankenstein, an uncontrollable monster has now been created that will run amok, and will defy many attempts for a long time to come to control it, before it is finally (?) put to rest.

Will 'they' worry? Not a bit, disaster means opportunity, and if you wonder who owns and controls most of the 'real' money - you know that horrible yellow stuff that we are told governments keep dumping and has no place in our modern world - they do!.

If you don't believe this now, unless you are in the advanced stages of senility, you will before long.

The best way to gain power over individuals, or nations, is to put them in debt. It can be a monetary debt, or your silence over embarrassing, or even criminal, activities in which they have been engaged.

On the latter, can you now see how so many politicians, especially heads of State, are allowed to reach high places with such dubious pasts, or weaknesses, that somehow manage to get revealed when, often unknown to us, they have not been conforming quite in the interests of their 'creditors'.

It also explains why they so often do things which can bring such outrage from the people whom they are supposed to serve under a democratic system. They have been caught between the devil and the deep blue see - and they chose the devil.

In the so called 'Good Book' I understand, ( I'm no authority) it says - "a man cannot serve two masters".

This is the dilemma faced by so many of our politicians. Many have set out with high ideals, they are basically (very basically in some cases) God fearing men with a desire to serve their country. But that was way back in their halcyon days. Somewhere along the way up the ladder, they met and sold out to the devil for the promise of fame.

They forgot that it also says in that 'Good Book' - "What profiteth a man if he gains the whole world and loses his soul". Are you hearing, Bush, and Blair et al?

The additional demand would not have been there had real prices not fallen.

In the period immediately after WWII, returning GIs went to work, married, settled down, had kids, bought cars, moved to suburbia, drove more. They were added labor supply, thus labor prices fell, some 20%. They introduced higher demand for petroleum products, thus the relative price of crude rose. With labor costs down and prices up, oil industry margins were high. With the high margins, investment in new production capacity became worthwhile and rose accordingly. Thus supply came online and caused relative prices to slide back to the point where margins were sufficiently low so that investment in new production stopped because the return on investment was higher elsewhere in the economy.

The TRC had the role of restricting production in order to provide its sponsors with higher prices per barrel. Having had the restraint by the TRC on production volumes, and from the Federal gov. on imports, prices were maintained at a higher level than they would have been otherwise. This caused further exploration and field development into low quality wells that would not have been put into production at free market prices. At the same time, the limitation on production by the TRC from each well and field caused the rate of return on investment per well to be lower, thus restraining capacity expansion in higher quality fields under TRC control, and extending development of fields where it did not have direct control. As a result, the oil industry's production structure was distorted, producing higher cost oil before lower cost oil, and providing unearned profits to those who could bring oil supplies from cheaper cost fields and sell into TRC controlled high prices in the US.

Such companies were the "7 sisters", who benefited from their position as the pumpers of the lowest cost oil from the ME, particularly Saudi, who had the privelege of selling in an artificially high price area.

During the price control period, the lower prices imposed by government regulation caused investment in new local production, and therefore, supply to fall, thus shifting supply opportunities from local US producers to foreign source oil at a much higher price (70% higher in the mid 70s, 40% in the late 70s). Again, the "7 sisters" benefited from the arrangement by restricting their competitor's prices, and therefore their competitor's supply. They made unearned profits and increased market share.

Shortly after the removal of the price caps on domestic oil production, the market was glutted by domestic and foreign oil, which proves decidedly that the price caps did not work towards the goal of lower prices, but quite the contrary, their actual goal and result was to maintain higher prices than were otherwise obtainable during the time that remained on the leases in Saudi.

Needless to say, this implies that the US government had been run, at least in part, for the benefit of these particular oil companies. Certainly in matters of ME foreign policy and intelligence, they steered action away from that required by popular support for Israel among the US public and in public government proclamations, towards appeasing the Saudi Royals so that leases are not put in danger and remain in their firm control. For this purpose, they had populated the State Department and the organizations that formed the CIA and NSA with their own people and with their banker's people. From this vantage point, they could steer actual policy rather than lip service. The "warm relations" of the US with Saudi, Kuwait etc. were the very profitable interests of particular oil company shareholders and executives, who were controling the reality of US foreign relations in the ME to their own advantage, regardless of the interests of the US public at large, or of their opinions. To a large extent, the whole of the "oil crisis" was caused by the artificial restrictions these oil companies forced on the industry through government, and also benefited directly from the initial conditions that followed the breakdown of their scheme, and forced the consequent actions of government in precisely such a way as to obtain the benefit of each step in the government's attempts to answer the crisis. When control of cheap oil from Iran finally fell away with the Shah, these companies pressed the US gov. to eliminate the price cap policy now that it no longer benefited them exclusively.

As I have said, government is always for sale. The more authority it has, the more patronage it's officials and politicians have to sell.

A very edifying presentation as usual. It is interesting that the defense department is sending out trial balloons right now about whether the US should abandon the Royal Family of Saudi and perhaps try to keep a control on the oil through direct occupation of US troops. Very interesting. Not sure if it is feasible but interesting that they want that message whispered about.

Yep, another good posting. And in particular where London is calling the bluff of the "financial brotherhood", in the know of the yellow precious ! But don't make the mistake of guessing their timing, Sir ! Do agree that night has fallen but have no idea what time it is, before dracula can satisfy his thirst for the (yellow) blood.

The problem the Military faces is not public opposition, it is State Department and CIA opposition to anything that could disturb the oil flow now or later, AND keep 7 X in as near exclusive control of it as possible. Without certainty that the Military operation would succeed and the fields be retained intact (remember that oil producing structures are rather sensitive to "dynamite on a string" sabotage), they would continue with the failed policy (for the US, not for 7 X) of acquiescing to as many of the Saudi Royal's demands as they can get away with. Neither State nor CIA have any belief in American's stomach for war on this issue.

If the Saudi freaks fund a set of terrorist attacks that bring 6000 dead and 5-6000 injured, it is fine so long as the oil flows, and flows through 7X. Let's just try and press Israel that much closer to the wall. Let's run exercizes with Egypt, who does not actually have enemies of substance to defend against (or do they intend to have some in the future?). Let's continue assisting in the most extreme oppression on earth outside of the Taliban and Sudanese slavers. Let's continue letting the Saudi's untouchable neighbors fester with malice while we have to continue subduing them at their people's expense, and ours, with us earning the hatred aimed at us several times over. Why? because the Wahabi clerics and Ayatulas in Iran would throw a fit and make the Saudi Royal's life a little less cushy or force them to live in Switzerland, London, and Paris.

Had things been done at the right time, we would not be facing this situation today. But that's spilled milk, a few million skeletons too late.

If push comes to shove and the oil fields are to be lost anyway, then State and the CIA might not oppose direct Mil action.

Belgian: No, I don't try to guess their timing ( I assume you mean for gold to move?) Well, one can try to work out from certain patterns as to timing on many things, but only as a guide to prepare. Taking action (ie committing hard cash) that's another matter.

Timing is the most important consideration in investing, and the hardest one to get right - or so I have found.

www.worldnetdaily.comSome credible reports of Osama having some nuclear material
surfacing at the link above.

Of course I hope Im wrong,but I see the world plunging into a disaster of WWII magnitude, even greater.

I see absolutely no chance of any Arab/Isreali peace deal.
The middle east terrorists, Arafat included, are just plain evil, and there is no way you can make peace with them. Just as you could not make peace with Hitler.Therefore, I see war as inevitable.

And the terrorists want war. They want to provoke Isreal into attacking in order to draw the surrounding Arab countries into another Arab/Isreali conflict.

I see the Bush administration making 2 serious mistakes.1)Not supporting Isreal in its legitimate right of self-defense and 2) Not responding with massive overwhelming force to Osama and the Taliban.

We are dealing with people like Hitler and the Japanese Agressors. Hiroshama and Nagasaki were the overwhelming use of force on an enemy that only understood force. Like it or not, thats what we need now.

Copied this from 'Kapex' worthy of a read particularly for Ag bugs - Netking;

". . . I said a few weeks ago that Silver looked like it would go to new lows if it went below a certain level. It did, and it did! BUT!!! The weekly chart shows a nice 5 wave decline to this low right in the timeframe allocated by the 30 and 60 year cycles that WD Gann found.

The target was a low this year around Oct - Nov and this is happening.
http://www.fyii.net/cgi-bin/chartgeu.pl?si.w
James Flanagan said in this piece that he sent out by mail last spring, and I quote him below...
"After the Dec 29 1932 low, the market adavnced 232% into a final high in 1935. This was followed by an 82% retracement of the entire advance into a historic secondary higher bottom on Nov 27, 1941. After the Feb 22 1993 low, our market advanced 114% into the 1998 high. This has been followed by as much as 75% retracement into the recent low at $4.37.
(This came out in the mail 6 months ago) con't

If we duplicate this 60 year pattern, our market would establish a higher bottom in NOVEMBER 2001 above the $3.50 low. This low in turn would be followed by a long term bull market similar to what occurred after the 1941 low. Between November 27 1941 and July 1946 price advanced 165% ( there was price fixing during WWII ) ***His parenthese, not mine*** Based upon our historic position, I believe our advance will be much greater than that. This would allow us to issue the second historic buy recomendation since we began publishing in 1990."

That above is the full paragraph near the end. The next paragraph titled "30 Year Cycle" says this further down...

"After the May 1968 high, the market retraced the entire advance into a final low on October 27 1971. Once this low was in place, price advanced 402% by February 27 1974. In other words, the final lows on November 27 1941 and October 27 1971 both supported historic advances. We will celebrate these anniversary lows in October/November 2001."

I sent this to a few people earlier this year and have wondered greatly about it! I am NOW no longer Wondering about it!!!

Just remember, looking back in hindsight a few years down the road, this area will be one that emits a feeling of shoulda, coulda, woulda, why didn't I.
As opposed to, "Oh my God, It's making new lows and become paralyzed" Years down the road, you'll look back and say "DAMN, that was a gift, and all I could do was agree with those bashing the bulls!" This is a good thing!

But again, WHY is all this control being exerted?

I think it is being accumulated in a Massive way!
The evidence that Andrew H. has found and Bill Murphy has posted Andrew's corespondence, shows that the IMF has told them to report the absent physical Gold as still being there. Then the IMF lied about what how asked these countries to report it.
IMVHO . . . "

auspec (msg#: 64636)---" Most roads will lead to....................London."

Just think how different it would have been if those Roman's would have hoarded their Gold coins instead of squandered them.

@ALL-Gold is the ultimate hyper-inflation barometer and has, IMHO, been surpressed in a world wide conspiracy by all of the world's CB's.

So I am in search of an honest CB somewhere within the world. A CB that does not sell Gold from its treasury, does not lease Gold from its treasury, does not conspire to drive the POG down by selling it short, does not gamble a significant percentage of its assets on derivatives, fights for a real value in its currency, works for its people instead of the bankster community, does not tolerate insider knowledge utilized for enrichment trading of a few, honors its debts to its creditors, provides timely information about its financail and non-financial activities to the world, is not ranked on the BIS list as one of the world's leading manipulators, does not fall under the control of other CB's to the detriment of its own citizens, and is admired by its citizens and not just its government for its activities.

Ted, have you gone off the deep end? My God, you don't nuke someone for shouting "Yankee, go home!" If that's what the folks at WND are subscribing to, then we should all be done with them. Israel should have made peace long ago.

And, no, I'm not trivializing the events of 9/11, but there's no way in hell that these actions threaten the security of the United States. They threaten only it's status as the world's bully.

I read here many diverse and well considered views about the relationship of current events to the world economy and the price of gold. Some suggest the possibility that war is the last option of a failed monetary policy. Is it actually possible that those behind the US government are culpable in the recent tragedies as some have suggested? I have no facts about the current tragedy/provocations; however, there are certainly historical precedences sufficient to necessitate a good amount of rational skepticism concerning official government pronouncements. The question: "Who Profits?", leads one to consider other possibilities. Some facts do stand out, ie., the central banks, in an effort to defeat the business cycle have far over extended. And, the Muslim religions' position on usury is in conflict with the entire Western (and now Russian) economic philosophy. If a New World Order is to be established by the banking cartel, are the Muslims "in the way"?
Our founding fathers were opposed to excessive concentration of political power. Many were also opposed to the establishment of a central bank. George Washington warned specifically against political parties (factions) and foreign entanglements.
Members of my family have fought in America's wars back to the American Revolution. Now, as an old man and veteran, I question the wisdom of some of those wars and their sacrifices, and I pray that we are not being fooled again. l

Elwood (msg#: 64657)---"And, no, I'm not trivializing the events of 9/11, but there's no way in hell that these actions threaten the security of the United States. They threaten only it's status as the world's bully."

Excuse me? Why is the U.S. the world's bully? You do understand that the citizens of over 60 nations died at WTC on 911 don't you? And you do understand that the World Alliance against world terrorism consists of over 60 countries don't you? So kindly explain to me why the U.S. is the bully instead of the instigators and perpetuators of world terrorism?

And while you are at it kindly explain how the events of 911 and subsequent terrorist activites such as anthrax do not threaten the security and well being of the world.

Are you kidding? A CB is just doing what most people do. See the last paragraph of auspec msg.#64640. From its beginings, it was to do what they thought would make money for them, they were not interested in making their people (clients/customers) rich.

Selling, leasing, derivatives are forms of gambling. Paying debts to their debtors - statistics show that a huge % of people are declaring bankruptcy, defaulting on their debts or are behind on their debts.

http://www.simmonsco-intl.com/web/index.aspA good source of information on the energy picture has been published by industry experts for decades. Matt Simmons is but just one of many. The Simmons and Co. Intl. has been advising the petroleum industry, investment banks, and Congress on the energy situation. There is free registration at the information web site. The publications, data, and analyses are freely available. Stop the flow of blood (Energy) and the patient (the economy) dies. Simple fact.

Yes, that old, funny, little, dirty evil man with a towel round his head who has to be assisted in order to keep on his feet, and pointed in the direction you want him to go, and whose hands shake like jello in an earthquake, is a very evil dangerous man indeed.

As are those ragged little urchins who dare to throw stones at those state of the art nice new Israeli tanks (which would unnerve a regiment of paratroopers) that rumble down their streets shelling the little hovels that are their homes, burying in the rubble their Mom's and baby sisters, or brothers, who can't run out of the way fast enough.

Lets not forget the evil young men who because all else has failed ie., no one will listen to their pleas for justice, strap explosives to their bodies and are prepared to die in order to make a statement.

A statement against a nation that used terror to establish itself, and has continued to use terror ever since - using as an excuse that it needs to defend itself, and was only taking land that belonged to it, or needed for its security.
The very words of Hitler.

It is being said, by Israel and its supporters, that the Palestine Israeli conflict is only being used by Bin Larden and others as an excuse. In other words, Israel is saying there is no real problem.

Good, then if it is only an excuse, take that excuse away from him and others, by establishing a proper Palestinian state and treating them as human beings, and equals.

At least, that would then reveal the real problem, should there be one. This we can all deal with.

Of course there are other problems, such as democratic governments who forget that they are democratic, that means - of the people, by the people, and for the people, no more, no less. But in those erring cases the terrorists will, at least, be all home-grown.

If this is not done, then you , and we all, have a legitimate fear of what may be down the road, whether we kill Bin Larden or not.

Are you kidding? A CB is just doing what most people do. See the last paragraph of auspec msg.#64640. From its beginings, its purpose was to do what they thought would make money for them, they were not interested in making their people (clients/customers) rich. Why was anyone interested in owning a bank? To make themselves rich!

Selling, leasing, derivatives are forms of gambling. People gamble. Paying debts to their debtors - statistics show that a huge % of people are declaring bankruptcy, defaulting on their debts or are behind on their debts.

So, before we find an honest CB, we need to find a completely honest person. Then that honest person could run an honest business. However, a stumbling block would be for the one honest person to find honest investors and employees. But I guess we can visit dreamland once in a while and do our wishing.

And Kaplan was not even mentioning (I presume) any fundamentals of supply and demand therein. What, it begs the question, would this situation be in the realization of a dead market in silver...?

A nice segue to the Ted Butler world view.....

.....Who does not incorporate (not a criticism on my part) the fiscal realities of hyperinflation and frantic grabs at real assets during currency collapse.... or hyperinflationary environment.

But back to gold...I had an interesting conversation with an immigrant from China (Taiwan) yesterday when discussed was the Roosevelt gold confiscation. She said that her country initiated something similar just after WW2 and issued in "exchange" certificates that could be cashed out later. Many threw these "paper gold" certificates away, but a wise few kept them or passed them to their children. These individuals then "cashed" them out at a 40% loss from what their original metal holding was worth. I do not have complete the timelines on these events.FWIW.

I wonder, with worry, what the political solutions will be to the coming calamities in the precious metals.

ORO: The TRC had the role of restricting production in order to provide its sponsors with higher prices per barrel. Having had the restraint by the TRC on production volumes, and from the Federal gov. on imports, prices were maintained at a higher level than they would have been otherwise. This caused further exploration and field development into low quality wells that would not have been put into production at free market prices. At the same time, the limitation on production by the TRC from each well and field caused the rate of return on investment per well to be lower, thus restraining capacity expansion in higher quality fields under TRC control, and extending development of fields where it did not have direct control. As a result, the oil industry's production structure was distorted, producing higher cost oil before lower cost oil, and providing unearned profits to those who could bring oil supplies from cheaper cost fields and sell into TRC controlled high prices in the US.

Black Blade: I see. Now just where are these low cost US oil fields? I see that under the current economic structure where there are few restrictions (other than environmental) US producers are now operating in ultra-deep offshore fields in the Gulf. On May, 9, 2001--TransOcean Sedco Forex Inc. (NYSE:RIG) said it has set a new world record for ultra-deepwater drilling when the company's Discoverer Spirit drillship spudded an exploration well in 9,687 feet of water in the Gulf of Mexico for Unocal Corporation (NYSE:UCL). That is quite an expensive venture if there are large "Cheap" oil fields scattered about. Just where are these low cost US oil fields?

North and South America can provide sufficient petroleum at a higher price. Unconventional petroleum sources such as the heavy bitumen sludges in the Orinoco Belt (Venezuela), the asphalt of the Athabasca Tar Sands (British Columbia), and the Oil shales in the Western US. It would require higher oil prices but it is doable. It was never about a shortage of Energy, but a shortage of "Cheap Energy."

The rest of the argument sounds like another nutty conspiracy theory. The politics of the Middle East are of no concern to the US. To deal with other countries, as Free Marketers is one thing, to interfere in their politics is another. Let natural selection take its course. Whoever produces a particular commodity will always sell it at a price. As far as the Oil Companies infiltrating the CIA, NSA and State Department and putting in place covert operatives to control foreign US oil policy is just nutty.

You're wrong. That's exactly what it was. They've been talking about it for years, but, it seems, no one has been listening.

Now that they've followed through, some suddenly get concerned looks on their faces, say they're ready to whip out the nukes and go to work.

Murder is murder, no matter how you cut it. Those responsible should and will, no doubt, be brought to justice, but to ignore the ultimate cause of their actions is to invite its reocurrence.

No one, including those that planned and carried out these terrible crimes, would or could have predicted that a single airliner was all that was needed to bring down a skyscraper.

BR549 (11/4/01; 11:56:21MT - usagold.com msg#: 64660)

"So kindly explain to me why the U.S. is the bully instead of the instigators and perpetuators of world terrorism?"

What else would you call us showing up on their doorstep with thousands of troops saying, "We're from the US Government, and we're here to help you. Just don't mind our boot on your neck while we forcefeed you these mighty tasty American dollars." The term "world terrorism" is a misnomer coined to justify more of this same. Notice, no one seems to be interested in shouting "Canadians, go home!"

WASHINGTON (Reuters) - U.S. Federal Reserve Chairman Alan Greenspan is widely expected to swing his interest rate ax for the 10th time this year on Tuesday as he tries to shore up an economy most analysts say has tipped into recession. Many analysts say things are looking so grim that they expect an aggressive half-percentage point cut, the third such move since Sept. 11. But some say the Fed should opt for a quarter-point reduction since its previous nine cuts have yet to fully impact the economy.

Black Blade: A new record. 10 consecutive rate cuts! That is an act of sheer desperation as the FED is quite aware that the US economy is hopelessly sliding off into the abyss. Time to accumulate gold and silver portfolio insurance. We likely haven't even come close to seeing a "Bottom" yet.

I had not appreciated the political significance of the subtle shift between defense department interests and CIA and State. It was indeed the Dept of Defense that was floating this particular balloon. I appreciate the insite. Thanks

Retailers and consumers may be seeking a respite from recent events with holiday shopping. But an ongoing war on terror, a slumping economy and mounting job losses have most analysts expecting ho-hum holiday sales. Holiday sales are crucial: Not only does consumer spending in general account for two-thirds of all economic activity, but also many retailers depend on holiday sales for roughly 40 percent of annual revenue. "Even before the terrible events of September 11, this was not going to be a very good selling season," Steidtmann said. "Unemployment was rising. Industrial production was in a steep decline. Corporate profitability was in full retreat. Tax rebates had done little to stimulate consumer spending. "The retail industry was clearly positioned to get a lump of coal. The Trade Center attack only alters the size of that lump."

Black Blade: This recession could be a very long drawn out affair. Several companies including Amazon.Com need this holiday season to be spectacular in order to survive. Many more bankruptcies and ensuing layoffs lie ahead. The "other shoe to drop?" In a word - "GRIM"

Pandagold and all. Read this post carefully as I feel it is right on the Mark. one sentence in the post sums it up, I think."Contact with the Western way is a threat to the power structure of a feudal society". Yes,it is the Freedom of America that is the threat. Congratulations to ORO for another insightful post. White Hills

THE MOOD in the market appears to be changing with the beginning of the festival season. In India, whether it is a festival or any other celebration, the first thing done is to buy gold and jewellery.

And, this is precisely the reason why India has remained as the world leader in the demand for gold.

Buying jewellery on occasions is a tradition in the country, however, what is important is to see that ``one gets value for money��, if the recent survey by the World Gold Council and Bureau of Indian Standards combine is any indication..."

-----------------------------------------------------
And to Pandagold- quite correct, it was "Up Pompeii".
Repeated in the '90s on UK satellite TV station "UK Gold" (curiously enough)

An Honest CB?? I really do not know, but think we are on parallel trails; you're looking for an honest CB and I'm looking for overlapping/intertwining ownership of various CB's. The more overlapping we discover, the less likelihood of 'honesty' being present. It does not look like ORO is going to address my questions about who owns the various CBs, so I will simply have to keep seeking these answers. Really can't say that I blame him. Part of the reason that a united ECB is transpiring is that these various countries were already intermingled in ownership of various 'independent' CBs, imho. Not that much of a stretch for consolidation.
In the distant past, Switzerland might have been a good answer for your question as far as maintaining sound currency, at least. Honesty is another issue altogether and I would not toss that term in their direction. Neither would many holocaust 'heirs' of confiscated gold. You may receive a deafening silence in search of Mr. GoodBank.
Regards,
auspec

And where to get your physical gold? None other than USA GOLD, who are renowned for delivering real gold as prizes for their inspiring competitions. Events that help to focus our minds on all that is great about the yellow metal, such as the fact that is nobodys debt (so nobody can default on it), and it makes excellent wealth insurance as a carefully considered component of a portfolio.

Whitehills: Well, if you think that ORO has hit in on the head in that post, then what can I say. Sept11 was a direct result of that sort of muddle thinking and a refusing to face the reality. And if you want more to follow, keep it up.

Some British, especially those in power, backed by media which painted the IRA as cruel murderers who were using the religious differences as an excuse to indulge in terror for terror's sake, held to this sort of muddled thinking based on our distorted view of history.

It was easy to believe them when we saw the horror displayed on the media, and with all the 'demonising' of individuals hitting you again and again.The media are professionals at it and all work as a team. (free press my foot)

Years of bombing and killings went by, and still they stuck to their ideas of why the 'terrorists' were as depicted.

Eventually the bombings got worse, then they hit the financial district of London, and it began to affect big business. It began to hit right where it hurts - the pocket.

In the end the two sides had to get round the table and were forced to make compromises.

You don't end things over night, and there will always be the off-shoot that doesn't accept the terms, but it gets down to events which can be handled.

It required climb downs on both sides, and it needs action to put agreements into practice.

And it comes from UNDERSTANDING that no man, except the odd individual nutcase who would be a loner anyway goes in for terror purely for the sake of it.

We, as a country, have faced more varied 'terrorist' activity against it than any other - a lot of it in the relinquishing of an Empire. So, I believe we have come to understand the causes better than most.

You want to believe ORO who merely echoes similar posters, and media, and who, strangely enough (probably pure coincidence)also are strong Israel supporters, go ahead. But, I guarantee with my life, that with that approach you will NEVER, NEVER have peace.

Why is the POG fixed in $ ?
Why is the POO fixed in $ ?
Why is the POS fixed in $ ?

Why isn`t the POW ( Price of Water)
fixed in $ ?

Why isn`t the POE ( Price of Energy)
fixed in $ ?

In what term should the POF ( Price of Freedom )
be fixed ?

At some point in the future when the $ is worth almost nothing ( except collection value of some seldom exposed pieces with misprint or special ink) when all the $ defenders have been exhausted and used itself up, a simple D2DB ( day-to-day-barter) will everybody give the chance to make a price in any item he can whatsoever offer.

...are indicative of deflationary pressure on the economy. The U.S. is in a position not unlike that of Japan about 10 years ago at the onset of their economic correction. Some like to argue that inflation and deflation are strictly monetary phenomenon, but this is not the case. In spite of a "fiat" monetary system given to an ever expanding supply of money, deflationary pressures remain, particularly on the supply side of the economy. The growth of free trade has drastically affected prices by flooding world markets with cheaper and cheaper goods, along with an explosion in financial engineering, i.e. derivatives, which has displaced traditional hedges such as gold and bonds and allowed a greater degree of debt management. Historically, the high debt levels we're seeing now are prognosticators of more deflation, not less. And a falling interest rate environment does not bode well for higher gold prices in the near term.

On the plus side for gold, the world is being swept towards war, which always lends itself to inflation as supply chains are disrupted by combat and diverted production. But those conditions appear to be some distance off, as Osama bin Laden and his men are not exactly a traditional army capable of such disruption, at least not at this point in time (I wouldn't rule anything out when it comes to these boys).

Bear in mind that the price of gold has been falling for some time in Japan in spite of their longstanding downturn, and as debt levels get harder to manage in the West, for both individuals and corporations, gold prices may yet drop some more, as they have in Japan. Ultimately, gold's fate may be in the hands of the "dogs of war", but by no means is gold out of the woods yet.

I just want to add something here. I am no particular religious or political persuasion, so I have no axe to grind in those two camps. I could live in most places on this earth if I had to. I was taught by my father to always try and see the guys point of view - as the American Indian philosophised - learn to walk in HIS moccasins before judging.

Once when still a young boy I was visiting an aunt in the Isle of Man, a small island between England and Ireland.

I passed a very old farm house. Carved in stone above the entrance was the following - "Judge not your fellow man's condition, until you be in his position". Another way of what the redskins were saying.

I never forgot it. It also bore out my father's teaching.

For some years I was in Law Enforcement, I am also a psychologist, so I have a little knowledge of human behaviour. In my dealings with some pretty low life, and hardened criminals, I found one thing they all had in common
they could all recognise the concept of JUSTICE.

When I say "honest" I mean a non-manipulative policy for the benefit of the citizens rather than member banksters. Also I look for well intentioned and from CB web sites (most have one) you get a flavor of where the CB heart is (although I admit that most of the time you never know what is going on beyond the CB PR department)

Of course the statistics for India's CB are not up to date, the finances of an emerging nation does not compare with the G-7 industrialized nations. Gold is used more in manufacturing than in wealth accumulation.

India's largest problems are earthquakes, floods, tornados, and agricultural failures. The focus is on feeding their massive population rather than mani;ulating their finances.

It seems from their published goals and objectives that their heart is in the right place:

"A crucial element of the ongoing financial sector reforms is the development of various segments of financial markets, strengthening the inter-linkages among various segments, introducing sophistication in market practices and products and building the technological infrastructure for the efficient functioning of markets. In the recent period, the focus of policy measures has been on enhancing the stability of financial markets by developing internal rules for healthy market activity, strengthening prudential and supervisory norms and redefining the regulatory role of the Reserve Bank in the context of financial markets. The amendments to the Securities Contract (Regulation) Act, 1956, which were brought into effect in March 2000, represent an important milestone in the appropriate assignment of regulatory authority over the financial markets. These amendments establish the jurisdiction of the Reserve Bank over transactions in Government securities, money market securities, gold related securities, derivatives based on these securities as also ready forward contracts in debt securities, in conjunction with the Reserve Bank's regulation of foreign exchange transactions under the Foreign Exchange Regulation Act, 1973 and later by the Foreign Exchange Management Act, 1999."

BR-As all CB's have their derivatives and paper gold but BoI seem to want to regulate the abuses.

"1.52 The Reserve Bank announced fresh norms on the concept of �capital funds�, measurement of credit exposures and level of exposure limits to individuals/group borrowers. The exposure ceiling for commercial banks in respect of individual borrowers is scheduled to be reduced from 20 per cent to 15 per cent of capital funds in March 31, 2002. With effect from April 1, 2003, the non-fund based exposure is to be reckoned at 100 per cent and banks are required to include forward contracts and other derivatives in determining individual/group exposure.

India's foreign exchange reserves comprising foreign currency assets, gold held by the Reserve Bank and Special Drawing Rights (SDRs) held by the Government increased by US $ 4,245 million (including valuation changes) during 2000-01 to US $ 42,281 million by end-March 2001 as against an increase of US $ 5,546 million during 1999-2000. The Reserve Bank's forward liabilities remained low, declining from US $ 2,225 million in August 2000 to US $ 1,259 million at end-March 2001. Net of outstanding forward liabilities and use of IMF credit, foreign exchange reserves increased by US $ 3,687 million to US $ 41,022 million as at end-March 2001."

I am looking for a CB that-

does not sell Gold from its treasury�no evidence found

does not lease Gold from its treasury�no evidence found

does not conspire to drive the POG down by selling it short�no evidence found

does not gamble a significant percentage of its assets on derivatives�does deal in derivatives but tries to regulate exposure

fights for a real value in its currency�losing its battle against inflation

works for its people instead of the bankster community�regulates its banksters pretty closely and policies have to do with helping out after weather, earthquakes, and food failures within the economy

does not tolerate insider knowledge utilized for enrichment trading of a few�I am sure it exsits but I could not fine evidence of it

honors its debts to its creditors�Moderate debt to IMF for an emerging nation

provides timely information about its financial and non-financial activities to the world-- If March 2001 is timely, no modern computer financial reporting system established, one planned.

is not ranked on the BIS list as one of the world's leading manipulators�not ranked

does not fall under the control of other CB's to the detriment of its own citizens�who knows?

is admired by its citizens and not just its government for its activities.�who knows?

India's CB (as all CB's) come under the influence of the BIS and IMF and have their allocation of SDR's and mix paper with physical Gold when totaling assets. They also hold a good share of their assets in FRN's. No actual published stats that I could find on the shorting or leasing of Gold from their treasury., so I assume that it is not being done.

So depending upon how India manages its derivatives, controls its thirst for Gold to be consumed in jewelry making, and refrains from selling Gold short, they seem to have their intentions pointed in the right direction. They utilize 10 year plans and seem concerned about feeding and the general welfare of their people.

I would give them a passing grade. Of course, who knows what really goes on behind the scenes and in the back rooms.
The link to India's CB site is provided above so if anyone wishes to dispute my findings, please do. I never get offended when I get corrected. I learn something.

If no other nominations, then next on the list: Bank of Canada - Banque du Canada.

Good idea to bring this up.
I want to bring this back to the basics : what are the sheeple demanding from the ones they supposed to have elected ? Prosperity as much and as fast as possible and with the least of efforts. The easiest way to obtain, instant result is in depreciating the currency as fast as possible. Something like, not having one cent in your pocket and getting a loan for your house on the basis of having a job at present. You surely get the picture.

What I learned from TG, together with critical re-observation of EMU (by myself), is that EMU, with its outspoken stability management, is showing evidence of trying to be honest. A lesson from the debacle of previous competing floating currencies, falsifying competition and policies.
The vast amounts of accumulated euro-dollars in reserve, are standing in the way to these honest efforts, for achieving full independance of the increasingly, value-falsified dollar. An elegant solution to get rid of this historic dollar-burden is on the order of the day. And for this reason, Gold is managed to come back into a more free and honest way.

It is still amazing to me that I had to find TG's theory, accidently, on a US forum and Golddealer CPM. There is no sign of dollar hostility/aversion, in Europ ! Probably, because we have to get rid of the dollar in a very discrete and smooth fashion, individually and officially ?

You hit it -- R-E-S-P-E-C-T -- so cheap to give it, so expensive when years of omitting it come back to bite you.

I've sat in front of a mosque in West Africa and shared a bowl of rice with a man who lost his fingers to leprosy. (I had just missed the roadside ditches littered with the dead and dying during the famine in the Sahel.)

I've been welcomed under the roofs of the poorest people in the world. I've also been hungry (really, very mildly) for a couple brief intervals. It doesn't take much to educate oneself in the reality of "There but for my good fortune go I."

But Americans have raised a nation of "hothouse plants" who make a beeline for comfort, and who, conversely, will walk miles out of their way to avoid the unpleasant realities of others' lives. (Whether or not they know they've contributed to those miseries is a further question.)

One must actively seek the experience of others' position, refuse to take the "guided tour" offered most White people in this world, and join the rest of humanity in some of its ups and downs.

You don't have to wallow in it, martyr yourself, or have a miserable life. You just need to learn Respect, and then do what Respect demands of you.

Maybe we can take this CB question 1 step/country at a time. Do you know WHO owns the Belgian CB, and how does this ownership become integrated into the ECB?
Same question to you Pandagold in reference to the BoE. I have seen the list of the 12 or so entities that form the ownership of our own FED and have NO doubt there will be overlapping ownershiop with many other CBs. Is this not a most {too} pertinent question?

(smile)You said:
One or two of my relations are thinking more of me as "smart" and less of me as a "PM nut" after events of recent months, they'll be buying themselves soon.
+++++++++++++++
Must be a cultural difference or time "zoned" phenominon. (grin) My relations still think I am a "nut", ignore the pm question entirely, and are "still caught in the headlights"
(loved that analogy!) vis-a-vis their shrinking returns on the markets - and are a little resentful when what I say comes to pass. May have something to do with me telling them they are going to get creamed, but not to consider this investment advice.

auspec (msg#: 64677)---"An Honest CB?? I really do not know, but think we are on parallel trails; you're looking for an honest CB and I'm looking for overlapping/intertwining ownership of various CB's. The more overlapping we discover, the less likelihood of 'honesty' being present. It does not look like ORO is going to address my questions about who owns the various CBs, so I will simply have to keep seeking these answers. Really can't say that I blame him. Part of the reason that a united ECB is transpiring is that these various countries were already intermingled in ownership of various 'independent' CBs, imho. Not that much of a stretch for consolidation In the distant past, Switzerland might have been a good answer for your question as far as maintaining sound currency, at least. Honesty is another issue altogether and I would not toss that term in their direction. Neither would many holocaust 'heirs' of confiscated gold. You may receive a deafening silence in search of Mr. GoodBank."

BR-Good points! I have also been anticipating a response from ORO that you previously requested. When he is finished with POO, then maybe he'll find time.

I wish I would have read your post before I posted my Bank of India CB. I think that you and others may have a point that the words "honest" can never be an adjective describing anything to do with a "bank" or "Central Bank". I figured that out when I started answering my own questions in my last post. I have found evidence that RR has been involved in the Bank of Argentina's demise, and his fingerprints all over the Bank of England, and of course, we all know about the Fed. (He was invited and attended one the previous FOMC meetings for what reason?) .

Interstate�While I agree that the entire financial system is corrupt, I think that there must be some country out there somewhere that regulates its CB for the benefit of its people. When you read the WEB at Bank of India, you quite a different flavor than when you read the Bank of Argentina. I agree that Honest" was a bad term to describe them but there are only two possible paths available:

1. ALL CB's are innately corrupt and the abuses are a worldwide conspiracy problem. (OR)

2. There are some CB's that are not buying into the world conspiracy and work for the benefit of their people.
I think that the evidence will lead strongly to Theory #1.

But I have found in my research about derivatives, the price fixing of Gold, and other abuses such as short selling of Gold to dull volatility, and the utilization of insider information for the few to make tremendous profits and the expense of the many non-insiders, that it is indeed a world wide problem. When I first posted this theory here, my idea was not exactly received with a ticker tape parade.

One last point and then I will shut up�with all of the problems that I have found in the manipulations of Gold and derivatives by the Bank of England, I don't see how some British based posters have time to "blast" the U.S. Federal Reserve (although it needs blasting). Let's hear some more about those crooked SOB's that run the BoE. Or any of the other G-7 and the rest.

Belgian-"There is no sign of dollar hostility/aversion, in Europ ! Probably, because we have to get rid of the dollar in a very discrete and smooth fashion, individually and officially ?"

I agree that Europeans are very smooth. The demise of the dollar are rise of the Euro will coincide with the accumulation of Euro's coinciding with the relacement of FRN's in the Balance Sheets/Financial Statements of the world's central banks.

So far, no accumulation of Euro's in non G-7 CB's yet, is there? Also the IMF and BIS deals exclusively in dollars.

Auspec: Hope you find your answer here: It started of as a private institution, but, in 1946 was nationalised (Owned by government)

Bank of England

Bank of England, central bank and note-issuing institution of Great Britain. Popularly known as the Old Lady of Threadneedle Street, its main office stands on the street of that name in London. The bank has eight branches, all of which are located in the British Isles. Although Bank of England notes are legal tender throughout the United Kingdom, banks in Scotland and Northern Ireland also issue notes that may be either used as currency themselves or exchanged for Bank of England issues. In all matters beside note issue, the Bank of England has sole central banking functions in Great Britain. The affairs of the bank are controlled by a governor, a deputy, and 16 directors.

It was founded (1694) as a commercial bank by William Paterson with a capital of �1.2 million, which was advanced to the government in return for banking privileges, including the right to issue notes up to the amount of its capital. In 1709 the capital was doubled; the charter was renewed in 1742, 1764, and 1781.

The bank's facilities proved a great asset in English commercial, and later industrial, expansion. The bank's functions were both public and private; it safeguarded the English pound and also operated for private profit. Efficient regulation was assured by the Bank Charter Act of 1844, which laid the basis for the bank's modern structure. The issue department, which handles the issuing of bank notes for general circulation, was separated from the banking department, which handles the remaining banking functions, including the management of the public debt, and serves as the depository of government funds and as the staple bank of England.

It was privately owned until 1946, when an act of Parliament provided for its nationalization.

The stockholders were compensated, and the bank subsequently dropped virtually all its private business. In 1997 the bank was given the power to set interest rates, a function formerly performed by the cabinet; at the same time its oversight of the British banking industry was transferred to the Securities and Investments Board

See J. H. Clapham, The Bank of England: A History (2 vol., 1944; repr. 1966); J. Giuseppi, The Bank of England (1966).

What is more important than 'owning' is controlling. Such is the 'network' of TPTB today that they now 'control' by fair means or foul ALL central banks of note (and not so 'of note') save possibly 'The Bank of China (Mainland). This excludes Hong Kong and Shangahi Bank.

But when a country needs to borrow money, and owes money, and which don't, and you control the money lending institutions.......are you catching on, Sir Knight? Good, then I don't need to say any more.

Thank you sirs for your comments. It is very difficult to divorce oneself from current political events when dealing in any part of the financial world. They are so interrelated.

It is particularly more difficult at present because of what has just happened, and the uncertainties we are facing.

I am so pleased that our providers of this facility appear to have understood this and have allowed us posters a fair amount of latitude of late.

The problems occur when we allow ourselves to get over emotional, because this clouds our judgement.

Emotion also stops a rational assessment of a situation, and we get things out of perspective. Media know this only too well, and media serves a particular interest. They bend our minds (or attempt to) with many techniques both direct and indirect.

However, though I may touch on the political climate occasionally, I will endeavour to keep it tempered, hopefully, to provide some balance to a comment or argument.

But, I hope that most of my posts will be gold related, which is a subject dear to my heart, and has all the excitement that a man needs.

The time that I have been outside the USA even without exchanging US dollars at that countrys bank for whatever currency( Pesatas, Lira etc.),the dollar was always accepted for any purchase. That is not the case in the USA. It has always been USA dollars to purchase items. Now that the dollar is headed for the toilet with THE BIG FLOAT, will Americans be willing to accept Euros or Russian Chevornets being back by Gold, for payment in the future. If this were possible I do not think the American people would even think of redeaming it for physical. They would just change from one paper/coin to another. I believe that at this Time the Euro and Chevonet will be circulated only in the EU and Russia. But what an influence it would be on the USA if those currencies circulated in the USA as the dollar has done around the world.
Turnabout is fair play?
Just another reason to own GOLD?
Slingshot

(I'm just catching up with the first season, on videotape, so it's got me de-toxing my nerve endings -- ah, that means, yes, laughing. You guys better practice for those hap-hap-happy days ahead of us. Snarf, snarf...)

(you DID get that GWBush/Colin Powell/bin Laden calypso one last week, didn't you?)

From your post #64694: "What is more important than 'owning' is controlling. Such is the 'network' of TPTB today that they now 'control' by fair means or foul ALL central banks of note (and not so 'of note') save possibly 'The Bank of China (Mainland). This excludes Hong Kong and Shangahi Bank." END

Thank you Sir, I was checking out the trees and overlooking the forest. I still have not been able to locate the list of Fed owners which is most illuminating {smile]. China certainly does seem the wild card, but one with much Brit influence.
Regards

I have to come back to the question of debt as a contract heading for fulfillment, vs. in a time of general default. In a time of major defaults, just as in bad corporate earnings announcements (9-11 period, for example), won't many major debtors take the plunge together? Lining up for debt absolution (or workouts -- think Argentina's offer this week) will be much easier taken in company with others of formerly high prestige. Jobs (their own) will be saved. Shame lessened, in large company.

In a general climate of default, what will be the incentive to further meet debt obligations? It can only be seen as a part of an overall business strategy, to be among the established players when recovery rolls around. Otherwise, isn't this what Corporations were formed for? To be the mobile -- and sometimes dispensable -- vehicles of capital (and access to Other People's Money) for the greater interests of the individuals behind them?

In a time of deflation, yes, cash is squeezed, and life necessities will be the first purchases. (Just which gold-holders, though, are likely to be also debtors in need of selling their gold reserves to meet payments? -- unlikely I think.) But for liquid capital, will banks or money market funds be the preference, at such low interest rates? And after the first round of FDIC rescues, or MMF's "breaking a buck"?

Gold would not receive the bulk of the new money created by the Fed, but it doesn't have to. It receives an unprecedented portion of liquid capital that is freed up to await deployment to pick up assets at the bottom.

Droke (who doubts FOA's hyperinflation) says: "Will Fed pump priming lead to hyper-inflation? In our opinion, it is doubtful in the highest. Remember, inflation is defined as the excess of the available supply of money over and above underlying demand. Just because the rate of money creation, and for that matter, the rate of change of money creation is increasing at an exponential rate does not necessarily translate to inflation. As long as there is a vociferous demand for that money, it's not inflation. Is there a tremendous demand for money in the financial markets/economy today? I think we both know the answer to that is a resounding YES!!! As long as Wall Street clamors for cash in a futile effort to fill the deflationary vortex it helped create, the Fed will do its best to accommodate. But not even the mighty Fed will succeed in filling this vast cavity. This is why we say inflation is all but impossible in the current economic environment..."

"So whatever impoverishes the public this time around won't have anything to do with bank and S&L collapses, but with something else, namely credit, equity, and real estate collapse. Has this already begun? Yes. Will it continue? Yes. "

But, he's writing on a gold forum, so he must believe that gold is headed upward.

His most useful, but perhaps contradictory to the first, paragraph follows: "Do we think the dollar will survive and actually appreciate in value over the next few years of runaway deflation? Sure. And it should actually do quite well in the initial stages of deflation...that is, until things really get out of hand and the entire debt system implodes. As for Fed money creation, keep in mind that in terms of actual dollars very few of these will actually reach the hands of those who really need them, namely, the general public. The Fed can turn up its spigots as much as they want, but it will only serve to liquefy the downside for the sellers. Also, much of this money is "emergency" money used to try to salvage disastrous situations on the part of financial institutions, corporations, etc., many of whom are in deep trouble. As long as there is a giant hole to fill (a deflationary vortex in the financial/economic system) it can't be called inflation until the hole actually gets filled - and then over-filled. We aren't anywhere near that happening yet."

He is pointing out, as I have not seen elsewhere, the _Targeting_ of the newly-created money. (In other words, it won't be there for you and me, brother. We'd better save ours up now!) It will be passed through to those institutions who are to be on board the "lifeboats" into the recovery.

A corollary to his paragraph above then should be that: It does not require inflation to "spill over" in general quantity from the Fed rescue efforts for gold to start its spike. All it requires is players with ANY freed-up cash (while others next to them are still sinking down the vortex) to begin deploying it to PMs.

Again: (The dollar)"should actually do quite well in the initial stages of deflation...that is, until things really get out of hand and the entire debt system implodes. "

I think what I would question of Droke, and what FOA would assert strongly, is that there is going to be almost NO interval during which the Dollar might enjoy its peak of deflationary glory, but that almost immediately are DEFAULTS of one sort or another (reserve currency status, paper gold markets, corporate credit markets, mortgage markets) going to drop that demand for the dollar like a stone.

Or, at least, drop it relative to other things that we here are interested in.

If debtors very quickly get the picture that it's going down, and there is little room in the lifeboats for them even if they valiantly strive to make their payments, then the debt dominoes will fall swiftly, and those creditors who manage to grab cash out of the slide, will hold it in real assets rather than newly-purchased paper.

This is how gold advances as a result of deflation -- when deflation drives too hard, and becomes widespread default. How close we are to that, is the measure we should be taking in the year ahead.

-The seven members of the Board of Governors of the Federal Reserve System are nominated by the President and confirmed by the Senate (see list at left for current membership). A full term is fourteen years. One term begins every two years, on February 1 of even-numbered years. A member who serves a full term may not be reappointed. A member who completes an unexpired portion of a term may be reappointed. All terms end on their statutory date regardless of the date on which the member is sworn into office.
The Chairman and the Vice Chairman of the Board are named by the President from among the members and are confirmed by the Senate. They serve a term of four years. A member's term on the Board is not affected by his or her status as Chairman or Vice Chairman.

"JP Morgan Chase & Co, the second-largest US bank, is reorganising its institutional equities group to emphasise derivatives, which are bringing in more profit than initial public offerings. The bank will reduce seven equities divisions to five and include corporate derivatives marketing in an expanded global equities capital markets group, according to a memo from the head of institutional equities, Mr Steve Black. Institutional equities, which is part of JP Morgan Chase's investment bank, will be divided into three regional groups - Asia, Europe and the Americas - plus global groups for equity research and equity capital markets. Bloomberg"

The Federal Reserve System, also known as the Fed, is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system; over the years, its role in banking and the economy has expanded. Today, the Federal Reserve's duties fall into four general areas:

Conducting the nation's monetary policy by influencing the money and credit conditions in the economy in pursuit of full employment and stable prices
Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
Providing certain financial services to the U.S. government, to the public, to financial institutions, and to foreign official institutions, including playing a major role in operating the nation's payments system.
This information, along with a complete overview of the Federal Reserve, can be found in The Federal Reserve System Purposes & Functions, published by the Board of Governors of the Federal Reserve System.

How is the Fed Structured?

The Federal Reserve System is composed of the Board of Governors and twelve regional Reserve Banks.

A major component of the System is the Federal Open Market Committee (FOMC), which is made up of the Board of Governors, the president of the Federal Reserve Bank of New York, and presidents of four other Federal Reserve Banks, who serve on a rotating basis. The FOMC oversees open market operations, which is the main tool used by the Federal Reserve to influence money market conditions and the growth of money and credit.

Two other groups play roles in the way the Federal Reserve System works: depository institutions, through which the tools of monetary policy operate, and advisory committees, which make recommendations to the Board of Governors and to the Reserve Banks regarding the System's responsibilities.

Who owns the Federal Reserve Banks?

Member banks must subscribe to stock in their regional Federal Reserve Bank in an amount equal to 3 percent of their capital and surplus. The holding of this stock, however, does not carry with it the control and financial interest conveyed to holders of common stock in for-profit organizations: It is merely a legal obligation that goes along with membership, and the stock may not be sold or pledged as collateral for loans. Member banks receive a 6 percent dividend annually on their stock, as specified by law, and vote for the Class A and Class B directors (see The Federal Reserve System Purposes & Functions for a description of the different classes of Reserve Bank directors) of the Reserve Bank. The stock is not available for purchase by individuals.

From what sources does the Federal Reserve derive its income?

The income of the Federal Reserve System is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. Other major sources of income are the interest on foreign currency investments held by the System; interest on loans to depository institutions (the rate on which is the so-called discount rate); and fees received for services provided to depository institutions, such as check clearing, funds transfers, and automated clearinghouse operations.

After it pays its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury. About 95 percent of the Reserve Banks� net earnings have been paid into the Treasury since the Federal Reserve System began operations in 1914. (Income and expenses of the Federal Reserve Banks from 1914 to the present are included in the Annual Report of the Board of Governors.) If a Reserve Bank were liquidated for any reason, all proceeds after the payment of bills would also be turned over to the Treasury.

Since the Federal Reserve has considerable discretion in carrying out its responsibilities, to whom is it accountable?

The Federal Reserve System is ultimately accountable to Congress, which at any time can amend the Federal Reserve Act. Passed in 1913, this is the federal legislation that established the Federal Reserve System. Legislation requires the Federal Reserve to report annually on its activities to the Speaker of the House of Representatives; and twice a year to the Banking Committees of Congress on its plans for monetary policy. The Federal Reserve also testifies before Congress when requested. Testimony is available from the Federal Reserve Board of Governors.

To ensure financial accountability, Reserve Banks are audited by the Board of Governors, which in turn is audited by a private accounting firm. Also, the General Accounting Office (GAO) can audit certain Federal Reserve operations.

Is this a "coming out" announcment?
-------------------------------------
Our future is today; if not just around the trail!

Sir Douglas; aka FOA

your: Gold - Trail - Guide
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It seems to me that FOA has been trying to convey, over the last several weeks, an impending acceleration of monetary events that will thoroughly affirm/establish his portrayal of the prevailing "political will" operating just out of view of most Americans. Time will obviously tell. Any speculation on the identity of "Sir Douglas".

...to the best of my knowledge, there's never been a time when interest rates were falling in which gold prices rose. There may be an odd exception or two, but that's a good rule of thumb.

As for gold in a deflation, the issue that comes to my mind is what will people, or institutions, purchase gold with? Cash is short in such a time, and there is a general reluctance to lend or borrow in such times too. And though gold retains certain monetary qualities, as evidenced by the continuing existence of CB reserves and (a now diminished) carry trade, it is no longer a currency, at least in the West, and thus seldom used in commercial transactions (outside the diminished carry trade and forward sales/derivatives).

Gold will shine, for Americans, when the US$ goes south, which it WILL do at some point in time, and interest rates rise again in defense of the currency. What happens then is anybody's guess.

Here is some of your cross pollination that you are looking for at the B of E. and other CB's.

Of their Monetary Policy Committee, only two out of nine members have ever held real jobs outside of the academic and/or BoE career environment. No entrpreneurs. None have ever done anything except feed at an organization trough (no business people) except for a short stint of Barker's at Ford in the US. Wadhwani has a background with guess who? Goldman Sachs�Yes the same Goldman that is involved with the Bank of Argentina and the U.S. Fed. How about that???

FedYour input has pretty much described the structure and function of the Federal Reserve Bank. What I remember reading, and can't seem to put my hands on right now, is that the Fed itself is owned by approx 12 banking entities. The names that come out of the depths of my memory are Chase Manhattan, Morgan Guarantee, Rothschilds, and Kuhn-Loeb{?}. Somewhat fuzzy, however.
Canuck is reading the Creature From Jeckyll Island, maybe the information is in there?
It is NOT a 'Federal' entity, being totally privately owned, unlike your 'nationalized' BoE. Neither is it a 'Reserve', but a totally fractionalized system.
This is clearly a worthwhile project in itself as we should know who is behind our CB!
Thanks!

This simple thinker, though appreciative of Trail Guide's efforts to educate us in economic theory and world economic practice, has an eye on her own little portfolio. How can it be adjusted to guard her family's small wealth now and in the future? That is why when each Gold Trail message comes out, I click over and search for clues. Message 117, which contains answers to questions from MK, gives a number of practical hints:

"The leverage today will be in a physical gold position, not any other form of gold ownership. By accumulating gold today, we are truly walking in the footsteps of giants, advancing with them as they work thru this singular, long term political move."

"While a U.S. physical gold free market will be locally encouraged, it will most likely simply be a shadow function of Euro Gold practices."

"I also expect a European gold coin to become real usable legal tender (not a collector item) and be named the 'EuroLand.'"

"A U.S. workout to cover its failed paper gold position will most likely be using gold industry profits. It could be done via 'windfall tax legislation,' plain tax or part of any variety of emergency financial arrangement. All built in order to allow our current gold reserves to be repriced at higher world levels and help our dollar stay somewhere in the next currency system. Considering the size of the failure, real gold will outperform any and all investments once this all gets started. However, we should not be naive and not expect some serious taxes of our own on bullion sales. Still, only just enough so as to keep currency tender protected from being supplanted with illegal gold use. Illegal in that too high a rate and everyone would use gold in barter and stop paying their capital gains taxes all together."

I wonder what Alan 'Goebelspan' is deluding himself about tonight? Shorting more gold shares in his offshore accounts? Mumbling into a secured link at his lackeys in Hong Kong and London? Poking pins into dolls of Ayn Rand?
Nothing surprises me anymore. It must be sad to be consumed by delusion.

Thanks for your reply to my post. I respect your opinion but you did not address the analysis in ORO's post and the points he made. I realize the gulf that exists between the Western world and the ME and probabily things will get much worse. However, as an American my first reaction to the terrorist action is not WHY but WHO. My next reaction is to eliminate the WHO and later on maybe ask WHY. White Hills

Auspec: The book I have mentioned "Secrets of the Temple" mentions, at some length the 'secret' meeting at Jekyll Island (an appropriate name, it seems) where they hatched the Aldrich plan. It was a clandestine meeting to work out some form of reforming the Feds structure. some of the banks represented were - National City (now Citybank) Morgan Bank and Kuhn Loeb.

Apparently this sparked a lot of conspiracy theories, and there is a lot of grey mist in this area.

As I said, or inferred, at the end of that first post, don't get involved into too much detail - it's all structured so you can't get at the real facts.

It is said that this world is run by about three families, who maintain a very low profile. At one time the Rothschild's were THE name in banking. The name came under a lot of attention especially as in those days, before the second world war, anti-semitism was rife in Europe. So they played down their role in international banking.

It was nothing to do with religion, or of ordinary Jewish people, though they often received much of the physical attention. It was caused by the power these bankers had, and how they used it to accumulate greater wealth, by their interference in politics, economics, and the financial markets, to bring about events from which they would profit, regardless of the misery it may cause.

Wars, for instance provided great opportunities for loans - and banking is only money lending. Things haven't really changed have they?

I am almost certain that the Rothschilds are one of those families, and probably sit at the head of the table.

They certainly control the gold market, and he who has the gold makes the rules.

This is why I do not concern myself about who is President, or Prime minister, or which party is 'in power'. The real government is the one you don't get to elect, and it wins no matter who you vote for.

Once again He who has the gold makes the rules.

Smile and be happy. If you want to join the big boys, get some au. The Rothschilds started by trading gold coins in Frankfurt (and a bit of money lending on the side).

His big clean up came after the battle of Waterloo. He had got news of Wellington's victory before it reached the newsrooms of England. He walked into the London stock market and told everyone that Wellington had lost the battle. He then started to sell some of his holdings which started a panic selling. As the rest sold, he secretly bought. As I said, things don't change.

It's hard to find much financial advice that doesn't upset a PGA's convictions. I've really tried hard, but can't get too interested or excited about most conventional stock or bond investments now. Stocks likely have a ways to fall before reaching a �fair value�. With interest rates dropping, bonds are gaining capital appreciation now, but problems will occur when rates rise.

Here is something I've done which might be of interest to others: I've created my own money market fund. Instead of buying FRN based notes or T-Bills, I put the proceeds into Au and Ag coins. I've structured most of this with money that I shouldn't need for several years at least, so I'm not too worried about the round-trip transaction costs. With the POG and POS being what they are, I'm not overly concerned about dramatic future price drops.

Thus I have assets which in a normal environment ( whatever that is ) should go up at least at the rate of inflation. If I have great need of money, I can easily and immediately convert a small or large portion to FRNs to do transactions. If any of us can read the future, there is a good chance that these assets will largely decouple from the US dollar, most likely with the dollar dropping. I am willing to give up a nominal 2.37% APR taxable interest income( in a 3%+ inflationary environment ) to possibly benefit from this.

Certainly most people reading this board have bought PM coins. What I'm suggesting is mostly a change in intent or state of mind, and not necessarily changing actions. Contemplate what you would do in a high inflation environment. Likely you would shepherd most of your assets in PM resources which would shield you from inflation, and only exchange these assets for FRNs as needed.

If the FOA dollar decline/hyper-inflation scenerio comes to pass, we will ALL be doing this anyways. I'll observe most American's don't have much experience in doing currency conversions or relative value pricing in their head. Might as well get practice now.

Economists will debate what the current low interest rate environment means, but one obvious thing is that you are losing money anyways after taxes if you keep too much in a conventional FRN based money market account. Certainly current rates are easy to forgo for the benefits of actual possession of assets, other tax related benefits, and participation in any PM bull market.

Certainly none of this is financial advice; just things to think about.

White hills The why often leads you to the who. Doesn't the detective always look for the motive (reason) when he has a crime puzzle? Even when a man has admitted to a crime, it has been found by some concerned officer who asked himself 'why'then found there was nothing to substantiate the admittance of guilt, discovered later that the person did not do it.

It is because of the 'why' that I am not convinced by a long way that Bin Laden was responsible for Sept11. But lets leave it at that, who am I against the US government, the British government, all the media and most of the brainwashed public.

From Robert Chapman:
"Rumor is that in the tragedy of the WTC on 9/11/01 that important papers in the case against Mobil Oil and James Geffen on illegal oil swaps between Iran and Kazakhstan, which was ready for the Grand Jury, were destroyed as was the evidence in the investigation of Gold Price Fixing stemming from Reg Howe's lawsuit brought against the gold manipulation cartel, which includes the FED, Treasury, BIS, and the bullion houses of Goldman Sachs, Citigroup, J. P. Morgan Chase and Deutsche Bank." END

Comment: Unnecessary. Reg gets his day in 'court' tomorrow, may the marsupials not show up.

http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor0auspec, BR: that WAS an amazing series -- it seems like something smiling down upon me indeed when I can ignore sports all year, and then tune in for this one edge-of-the-seat thriller and be just an American kid again. It's also an inspiring reminder to me to do my best when things are going the other way...

Stephen Roach & crew; I haven't gotten through all the Euro stuff yet, but it has the level of detail that reminds us we know almost nothing of the banking and fiscal systems behind it. We get FOA's and Oro's and Randy's differing views but I don't feel far enough along to back up or critique any of them, or reconcile them for myself.

Oro had some provocative insights about them last week, and I meant to puzzle some of it out here. In supporting the Wahhabi extremists, were the Sauds playing a game to make sure there always APPEARED to be a threat to their rule, so as to keep the US in line with them? And then, has that threat (which of course was itself playing to win) gotten out of hand by Saud miscalculation?

What a story will be written when all is known about their inner workings.

Greek mythology tells us that everything Midas touched turned to gold. How fitting that his father was Gordius, the peasant king of Phrygia. He gave us the Gordian knot and Reg Howe will try to untie one on Monday when he leads argument in his impudent case against an alleged gold cabal in Federal Court in Boston. . . .

The whole business of the conspiracy could be staged as a drama. Gold Anti-Trust Action Committee chairman Bill Murphy is a natural Midas; everything he touches turns to publicity. The "gold cabal" could play Apollo who furiously planted donkey ears on Midas for disapproving of the god's music. Wouldn't they just love to kick that ass�? Reg Howe, swashbuckling plaintiff, is a natural Alexander the Great.

Murphy could also be cast as Gordius. He has succeeded in knotting the knot. At least Gordius's knot was made of bark; Murphy's is a ball of superfine fishing line. In many ways, Midas Murphy seems to need the conspiracy even as he curses it. But he is an effective and loyal scabbard bearer for Alexander-Howe.

As Howe strides to the bench clasping his sword he risks transforming into a subject of Gordius. To prove his assertions he must abide by the judicial familiarity with Gordius's linear thinking that rules out drawing a sword. Instead, he must rely on his elaborate deconstruction of the knot. If all goes to plan, then it will not be Howe untying the knot, but his opponents who unwittingly tug on a slipknot that he has prepared to reveal a theft of Promethean proportions . . . . Good luck Reg.
------------------------------------------------------------
You missed out in the Mining Web story line Chris Powell as did our local girl Xena! . . . but we all hope that against TPTB that this impasse is broken open and that the truth is revealed for all. We know that sooner or later this will be the case. Good luck Mr Howe & team.
- NetkingView
Yesterday's Discussion.

Snippet:
Our forecast for the next 12-18 months is that the high rate of inflation (money supply growth) over the past 12 months will boost prices and that commodities will be the major beneficiaries of the inflation. As is usually the case when commodity prices are pushed higher by inflation, bonds will not fare well. . . "

The Nationale Bank van Belgie : Partly owned by the public, through shareholding, as listed on the Brussel's stock exchange. The (SM) valuation of the National Bank, never exceeds its estimated bookvalue. Price fluctuations are in line with its dividend and general interest rates. A dull but reliable shareholding.

At the first shock of Belgian's (supposed) Goldsales (400 tonnes-somewhere in '96-320$/ounce - ?? ), the public (private-shareholders), raised hopes on a gigantic windfall, increased valuation or a super-dividend ! Nothing happened. The answer was simply, that the revenue from the Goldsale(s) would be used to comply for EMU participance, due to the debt situation of 120% of GDP.

There were no questions (allowed) in parlement and that was it. Recently, some (chocolat) Gold fanatics, tried again to mobilize a parlementarian for questionning about the Belgian Gold treasure (once-1.300 tonnes for a mini country)
Absolute silence with the usual blablablah!

As soon as you mention *Gold*, in relation with the nationale bank...all communication is interrupted. So my answer is very simple and disappointing : I know nothing about the "why and how" of the relative big Goldstash that was before.

I do remember that a fistfull of Nationale Bank shareholders (private) adressed "Deminor", to take up their defense in the Goldsale-dispute. Deminor is a Belgian/French organization that is specialized in the defense of public shareholders in disputes. And if I'm not mistaken, Reg Howe is also using their services in the BIS case.

I concluded that nothing could be done and no information will ever be available (for us little fish) on this whole Gold-sale-transfer-EMU-swap-etc....Top secret, and that's it.

Indirectly, it might be some strong indication that TG's theories are in the work out phase, after all these years, and that it all is WA -related.

Since I'm totally non-political, It is impossible to gather more inside information on the *very important* topic.
Democraty...shhhhhiaahhh ?

A few years ago, the question was raised, what would happen to the public shareholding of the Belgian National Bank, when it should be fully integrated into ECB ? How should the shareholding be liquidated ? Again, no sign of any answer to that. On your question, who is behind the CBs, is the government as policy-maker and guardian of the confidence/trust in fiat.

CB-policies are a matter of National (?) interest as is state security. The only democratic grip on it is that it is the elected government who decides on the policies, with a minimum of transparance. The governor of the belgian CB has been the same person for almost live. Political proxy of the biggest political party. Today, he has been followed up by a family member (nepotism). Evidence of the top secret atmosphere that surrounds it. No way to find out what they are really up to. Only left with dry announcements of what happened, POST FACTUM ! (cfr. goldsales or fiat devaluations)

And with this, we land again on the -political- will terrain.
Currency strenght/weakness in function of what ? And this is a matter of pure policy and power relations, above the heads of the ones we think, that are in charge of these CBs.

The more that trust or distrust in fiat is a matter in the welbeing of a prosperous economy, the less we will detect on future policies. As soon as dollar-strength becomes counterproductive in globo, things will change dramatically.
And it is this fiat history that we (Goldadvocates) suppose/believe, is to run on its last legs. No matter who owns or controls the CBs. Interest rates and fiat purchasing power, can go to zero, as can the amount of Gold in the vaults. But Gold valuation can never reach that same zero. It is as essential as oxygen , water and food.

For anyone seriously interested in the GOLD market, you have to understand something about the name that is synonymous with the precious metal. Everyone has heard the name, but how much do you really know?

Well, you will never know everything, for much is shrouded in secrecy. This is also why you will never know everything about the GOLD business.

But, if you ever doubt the importance of GOLD throughout history, you won't after you become more acquainted with, at least, what we do know about this family whose influence touches ALL our lives.

Here is just a little to wet your appetite
( Taken from Marcus Angelicus Gold-Eagle)

The English House of Rothschild (N.M. Rothschild & Sons)

Of the two major Rothschild Houses (French and English), the London House (New Court ), founded by Nathan Mayer Rothschild and operating today as N.M. Rothschild and Sons, is undoubtedly the most influential, especially as it pertains to gold and currency trading. Twice daily a Rothschild agent sits in a cloistered room "fixing" the price of gold in the world's largest bullion trading market: the London Bullion Market Association ( LBMA ). Historically, N.M. Rothschild was owner and operator of England's Royal Mint Refinery and was the primary gold agent to the Bank of England.

Nathan helped finance Britain's conquest of Napoleon at Waterloo, and benefited in London's stock market from advanced knowledge (from his superb courier service using pigeons) of Napoleons defeat at Waterloo. Nathan helped finance the Duke of Wellington's army having bought 800,000 pounds of gold from the East Indian Company for $8 million then selling the gold to the Duke to help defeat Napoleon. Hence, Nathan became chief broker and pay master general to England's most important army; the Rothschilds were England's lifeline for getting paycheques to the English army. Nathan could single handily wipe out savings of many a competitor by dumping "consols" in London driving down their share prices, as he did with the advance news of Napoleon's defeat. Nathan eventually switched businesses to "buying and selling money only."

On a daily basis, Nathan was legendary in London's markets for jumping in and out of the market with tens of thousands of princely rounds, never too early and never too late. Eventually Nathan would become richer than Prince William, his father Mayer's German client. It is said that the Rothschilds were the inventors of the courier service using passenger pigeons to relay news amongst the family and to their client beneficiaries. Nathan's ability to depress stock prices, then buy them up after people panicked was legendary.. He would use Rothschild agents to send false news which would be used by observers falsely leading the crowd astray, then he would buy up the same stock at ridiculous low prices. One of the Rothschild's first victims was the legendary Barings and Ouvard Bank which Nathan almost destroyed after their competitor attempted to wrestle merchant banking business from the House. Ironically, Barings Bank recently suffered an untimely death at the hands of a rouge derivatives trader in Singapore!

More than any other family, the Rothschilds have built and maintained an empire unparalleled by any monarchy in history. Their acumen as money changers and financier to the leaders of Europe over the past 200 years is unparalleled. No single corporation or business entity has survived with so much accumulated wealth intact.

To this day, N.M. Rothschild & Sons of London still lists as its primary business the selling and buying of treasuries and gold bullion. N.M. Rothschild helps fix the price of gold in London each day through the LBMA. A recent London Times articles explained that the gold price fix ceremony where five men (including a Rothschild) talk on their phones for 10 minutes, then lower tiny Union Jacks sitting on their desks, thereby fixing London's gold price each day. This ceremony takes place at 10:30 a.m. and 3 p.m., like clockwork, the same way, in the same place, and with mostly the same firms participating since the first gold fixing was enacted at Rothschild in St. Swithin's Lane on Friday Sept. 12, 1919. The company's name is also associated with many gold mining companies (e.g. Trillion Resources Ltd. and other Canadian mining companies).

The French House (Baron Edmond de Rothschild et.al.)

The French House, which was most recently headed by the Baron Edmond de Rothschild, was the most powerful private merchanting banking arm and the richest of all the Rothschilds and ran the Compaigne Fincanciere, a world wide organization which builds villas, hotels, pipelines, and finances other banks. Rothschild Freres, run by cousing Baron Guy Eduoard, was the largest private bank in France. The French House also controlled mining companies ( De Beers and gold mines in South Africa ) , metal plants ( Rio Tinto ), oil interests ( Royal Dutch Shell ) , and chemical industries (Morton, 1962). The Baron was estimated to be the richest Rothschild and probably the most multiple millionaire/billionaire in Europe. That wealth is now passed on to his son, in Rothschild tradition always to the males, Benjamin ( 34 years of age ) . Edmonds cousin Baron Guy Eduoard was director of the Bank of France. Baron Guy, who owned the Compagnie du Nord railway network in France, was known to use participants to join in ventures serving as initiator and packager as well as guarantor with very deep pockets of cash.

As Morton (1962) notes, the two banks in London and Paris are still probably the largest private institutions in the world. "Although the French house controls scores of industrial, commercial, mining, and tourist corporations, NOT ONE bears the family name." In the 1920s the banks of England and France were organized under the French House into a noisless international syndicate that reached from J.P. Morgan in New York to their cousin Baron Louis' Creditanstallt in Vienna, Austria.

To appreciate the Rothschild's ability to sustain and increase their wealth and avoid the scrutiny of both the public, the markets, and the state taxation system, consider the story of the death of Edouard Rothschild, of the French House. Anticipating the death of Eduoard in 1949, Rothschild agents began to sell their majority stock holdings of Royal Dutch Shell, Rio Tinto and Le Nickel ( giant mining corporation ) to drive down the price of shares just prior to his death to reduce the value of the estate that was subject to taxation by the French Government. This selling created a panic in the world markets depressing stock prices further. A few days following the death of Eduoard, Rothschild agents bought the volume of stock back at depressed prices, and his reported estate wealth was taxed at the depressed price on the day of his death. One should never underestimate the capacity of a Rothschild to influence markets, even today.

Rothschild interests touch virtually every aspect of our lives. They helped found and finance Royal Dutch Shell and De Beers. Following World War II they invested in vast areas of resource rich properties in Canada, possibly gold rich deposits. Joey Smallwood, premier of Newfoundland, Canada, described the 50,000 square mile land purchase by Rothschild as the biggest land deal in Canadian history. Their influence extends to the Bank of England, Bank of France and most likely the U.S. Federal Reserve, and possibly the IMF. They thus have enormous influence on the world's monetary policy.

Accounting for the Rothschild Wealth and Influence

Morton (1962) noted that the Rothschild wealth was estimated at over $6 billion US in 1850. Not a significant amount in today's dollars; however, consider the potential future value compounded over 147 years!

Taking $6 billion (and assuming no erosion of the wealth base) and compounding that figure at various returns on investment (a conservative range of 4% to 8%) would suggest the following net worth of the Rothschild family enterprise:

A little of $300 billion US buys every ounce of gold in every central bank in the world (see John Kutyn's estimate (http://www.gold-eagle.com/gold_digest/kutyn111597.html).
U.S. M3 money supply August 1997 was $5.2 trillion
U.S. debt is currently $5.4 trillion.
U.S. GDP (1997; 2nd Q.) is $8.03 trillion.
George Soros' empire is worth an estimated $20 billion.

We shall never have a full accounting of their wealth. All we can go on is Morton's (1962) comment that their wealth is "ineffable as always." Even our conservative estimates suggest a family with staggering wealth and thus influence. In a world awash in debt and unsustainable fiat currencies subject to implosion, the power of gold and the preference of the Rothschilds to gold cannot be easily ignored.

The Rothschilds and the LBMA: The World's Central Bank?

Consider the Rothschild's profound position of influence in the LBMA and the transaction fees they are earning on each and every transaction of treasuries and 42 million ounces of gold transactions DAILY (recently reported volumes of physical, leased, forward sales). . The Rothschild business earns income from "transactions" (including transfers, calls, puts, trades, leases) and one can only begin to imagine the transaction costs associated with last reported trading of over 42 million ounces of gold per day through the LBMA (more than twice South Africa's annual gold production).

Also consider their involvement and influence over monetary policies exercised by the Bank of England and the Bank of France (and possibly the US Federal Reserve System) and in Geneva. Consider the world's above ground gold reserves is roughly 120,000 tons -- with roughly 40,000 tons or 33% held by central banks. How is the remaining "private" gold holdings distributed? Does anyone have such an account? Certainly not the World Gold Council and their statistics. If a single private owner held 5% of world's remaining gold, would that not constitute majority share holdings? If any player could have accumulated, and could afford a 5% holding of the world's gold supply over the last 200 years, it would be the Rothschilds.

Could it be that the Rothschilds through their involvement in daily London gold trades are quietly amassing more of the precious metals in their private vaults, while the confidence game of the Central Banks tries desperately to avoid what Soros calls "unsustainable" fiat currency built on unsustainable debt? It was Mayer Amschel Rothschild who kept a secret subterranean vault full of gold beneath the House of Rothschild in Frankfurt in the 1770s (Morton, 1962) .

While the world is led to believe that gold is a barbaric relic of the past, a huge confidence game is being played out in fiat currency markets, illustrated by the events in Asia. In order to maintain confidence in inherently unsustainable fiat currencies and unsustainable debt, confidence in gold must be depressed, given that it is the only alternative store of value. The increasing volume of gold transacted through LBMA reflects the crescendo this confidence game has reached. These large volumes also suggest that gold is trading as currency and not as a barbaric commodity, as the press is apt to suggest. Could it be that the LBMA is being used as a testing ground for the establishment of a new gold-backed world currency system? If so, the Rothschilds are in a position of enormous influence over such a genesis process.

Consider these words of Stanley Fisher (WSJ, Nov. 12, 1997), IMF's Deputy Managing Director: "What is needed at this point in the world's economic affairs is leadership in setting up a SYSTEM more dependable than using IMF bailouts as a guide to the future value of money. Where that leadership comes from is a tough question."

Indeed, will the leadership and system Fisher is speaking come from the House of Rothschild through the central institution of the LBMA? Only time will tell.

If the Rothschilds, through the LBMA operations, are effectively cornering the world's gold supply they would undoubtedly be in a prime position to benefit from a currency crisis - which they and Soros undoubtedly expect, given Soro's claims that the Asian, and thus by implication all fiat currencies, are inherently unsustainable. This crisis of sustainability is already engaged in Asia and will undoubtedly wash over Europe, England and the U.S. And who recently announced another bailout package? The IMF, of course.

The Houses of Rothschild, more than any other players, knows the historical power of gold and importance of a gold-backed currency system. The English system they helped engineer remained resilient and sustainable for over 200 years until the early 1900s. The Rothschilds believe in gold as the ultimate store of value; always have and always will Undoubtedly they do not consider the metal a barbarous relic of the past.

Epilogue

We are reminded of Morton's words, "today the family grooms the inaudibility and invisibility of its presence as a result, some believe that little is left apart from a great legend - and the Rothschilds are quite content to let legend be their public relations."

What is unique about old power and money of the Rothschilds is their uncanny ability to sustain their power and wealth, and keep it within the family. While it is a tribute to the power of family, the danger is their ability to control and influence the daily lives of average human beings, with fewer resources and less power. Such power can lead to the temptation of becoming as powerful as the gods. Control over such important forms of value such as gold, as an instrument of liberty, may lead to the temptation of exercising dominion over such liberty. The maintenance of power and wealth is ultimately motivated by an anxiety of losing the security that such power has provided. The power and wealth of the Rothschilds carries with it enormous privileges and hopefully a sense of responsibility for the welfare of others. While the Rothschilds and Rockefellers have exercised philanthropy to the benefit of many, even this exercise has benefited their corporations through a tax system which rewards such "charitable" and "atruistic" organisations. What distinguishes the Rothschilds from other world power brokers, like Soros, is their diminutive "presence" in the world, in spite of their untold influence on almost every aspect of our economic existence. Their continued bullishness on gold exhibited through their activities in the LBMA and gold trading suggests that we maintain our confidence in the this barbaric relic. Ultimately, however, one must be keenly aware of the potential controlling influence over gold which the Rothschilds and their merchant banking brethren can exercise, and thus placing our liberty in their hands.

It has been said that "the wealth of Rothschild consists of the bankruptcy of nations"

Remember in many of my early posts when I used to get up some people's nostrils with my 'Try to see the BIG picture'?

Stop (all) focusing on small details and stretch your minds until your head feels it will tear apart. It is IMPOSSIBLE to think big enough to see just what makes this world tick.
Unless you really can conceive infinity, and the number of stars in the universe.

"............The alternative interpretation you can put on it is that the 'store of value' function for gold has now gone. And I think the jury is still out on that issue. The Dow and all the markets are now perhaps more realistically appraising what the implications of September 11 are," Thompson said. He as also speaking on Classic Business.

However, Thompson believes the outlook for the gold price is better than it has been for a while and adds that gold equities are still cheap compared with the cost of borrowing money. This makes special sense for Gold Fields's strategy. The company has announced two transactions to buy gold assets with a number of others in the wings.

Thompson said the price of assets is such that his company could make a cash-on-cash return. Gold Fields has borrowed money today at Libor (London Interbank Offered Rate) plus 1 percent, which is a total of between 3.5 and 4 percent. This compares to gold assets which at current spot prices offer 10 to 15 percent rates of return, he said."

US/ECB/BOE, calling for further IR declines (0,25%-0,5% -tuesday/thursday) and Ali Rodriguez, calling for rising crude prices (1 million barril cut), with POG, relatively unmoved, in between ! And some more (1,2 billion $) money for Pakistan.

And the one and only virtual prosperity-positive, remains the US stockmarket, not willing to crash to earthlike valuations ! The last domino holding the dollar's hand.

In Geneva, a major conference on employment has ended with a warning that millions of people across the world face losing their jobs if action is not taken now to safeguard them. Winding up the three-day Global Forum on Employment, the International Labour Organisation (ILO) said the need to tackle an impending crisis in the global jobs market was now urgent. "The loss of nearly half a million jobs in the United States in the past month shows that the tidal wave has started to move and will end up on everyone's shores," said ILO vice president Bill Brett.

Black Blade: The "Bone Pile" grows higher daily. Not likely to improve anytime soon. This is certainly not a good sign of a growing economy. In a word - "GRIM"

It's the best of times for America's globally pace-setting sharemarkets and the worst of times for America and the world. But the bulls claim there isn't a contradiction. It's simply that the equity markets are looking through the present economic downturn to the better economic times that lie just ahead.

They have deployed the same simplistic argument all year long as they tried to stem the bleeding in the sharemarket and succeeded in sparking rallies - but even the worst weeks in US and world economic history for a long, long time are failing to shake their story.

Black Blade: Good article! Horrific data and yet the Pied Pipers continue to spin "Good Times Ahead." They are just churning commissions. This is going to get ugly when a sense of reality sets in. Again we hear that Mutual Funds have a strong net withdrawal of funds (again) last month. The title of the linked article is a good take off on Monty Pythons "Life of Brian" where at the end Eric Idle is crucified and sings - "Always Look on the Bright Side of Life." A lot of unsuspecting investors holding "for the long term" are about to be crucified, yet I suspect they won't be singing "Always Look on the Bright Side of Life."

What do Martha Stewart, Big Steel, automakers, Planet Hollywood, trendy clothing manufacturers, software companies and Scottish pubs have in common? Each is blaming poor financial performance on the recent terrorist attacks. To hear executives tell it, lagging attendance at the MGM film "Bandits," a dip in burger sales at Wendy's and fewer portabello-mushroom pizzas ordered at California Pizza Kitchen restaurants are explained by two words: Sept. 11. Not since the Persian Gulf War a decade ago has business latched onto a single uncontrollable event to account for lousy financial results. Airlines, hotels and the TV networks clearly were pummeled by fallout from the tragedy, but economists said other industries may be using the terrorist acts as cover for longstanding problems or as an excuse for job cuts.

Black Blade: The terrorist attacks couldn't have come at a better time as the ghouls in corporate Board Rooms across America breathed a sigh of relief as Airliners crashed into the WTC and Pentagon. Now they had an excuse to cover-up miserable performance and falling profits. This is absurd of course, as we have been calling the recession long before the Sept. 11 terrorist attacks. This is quite convenient.

SINGAPORE (Reuters) - Oil prices made small gains on Monday, extending a recovery from two-year lows, while OPEC signaled it may make deep cuts to world supplies in an attempt to revive the flagging market. Benchmark U.S. light crude rose 15 cents to $20.33 a barrel in Asia following Friday's 21-cent loss in New York, when crude briefly touched a low at $19.69, a level not seen since July 1999. OPEC Secretary-General Ali Rodriguez said on Monday the producers' cartel may consider a reduction in crude output of more than a widely-touted one million barrels per day (bpd) following last week's renewed slide in oil prices.

Defeating international terrorism is vital for economic stability and prosperity, Tony Blair is set to tell business leaders.
In his keynote speech to the Confederation of British Industry annual conference, the prime minister will concede that the 11 September attacks on the United States have already "seriously affected" the world economy.

These people are unbelievable. How about getting your economic house in order. How about stopping manipulations - be it Gold, Silver, Copper or any other commodities. How about paying developing nations a just price for their goods and services. Why don't the IMF bully boyz stop shafting the currencies of others. These and many others more are what is required. Stopping international terrorism is way, way down the list IMHO.

http://www.usagold.com/Order_Form.htmlEd. Note: Here we reproduce a portion of the Commentary & Review to give
new visitors an idea of what goes on at our client-only page. Access is made
available to prospective clients here with a free, one-time registration for access
codes (link above). You'll also gain access to our News & Views: A Quarterly Review of
Forecasts, Commentary and Analysis on the Economy and Precious Metals.

11/5/01

In Brief: Gold was down in early trading with a slightly stronger dollar playing
the key role. Stocks are rallying on the prospect of another rate cut at tomorrow's
Federal Reserve meeting, and that is also drawing attention away from the gold
market for the moment. Traders report strong physical demand particularly from
the Mid East and Pacific Rim, but the paper trade in London and New York was
characterized as "quiet" and "rangebound." John Reade, analyst at UBS Warburg,
told Reuters: "With the funds now net long only a small amount of gold...there is
renewed potential for fresh speculative buying to take gold higher.'' A little
perspective: While most assets tumbled following the chaotic events after
September 11th, gold prices have bucked the trend showing a roughly 5% uptick
from that date at the current $280 price and traded over the $290 level at one point.
Stocks, bonds and saving vehicles have suffered from the dual onslaught of sliding
values and the shrinking real rate of return on the dollar. Perceptions are changing.
(More, go to link below) - - - - - - -

i wonder how much money geo.w.bush is putting into swiss bank accounts of the leader of tajikistan and other neigbouring countries so to use their country as a taking off place so they can kill more civilians in afg.if these leaders are smart they would be asking for gold and silver instead.

Bank generally gets a passing grade in honesty but site is difficult to navigate.

In charge of CB-- shows heavy academics and either been with bank total time of with government. No outside business experience, no evidence of ties to large brokerage houses or derivative brokesters--

Derivatives--
Poor presentation of financials makes it difficult to determine what kind of Gold manipulations have taken place. Summary indicates a cutback in derivative activities with most having to do with currency swaps as B of B moves from FRN's to Euro's. Backgrounds of some of directors shows interface experience with BIS, IMF, and Euro conversion committee. Euro activites now outnumber FRN in swaps. Interest based derivatives being cut back on in BIS survey.

According to WEB site:
"The net turnover recorded per business day in terms of single currency interest rate derivatives has
almost tripled to USD 14.2 billion. The more flexible instruments, interest rate options (percentage
share 8 %) and interest rate swaps (percentage share 84 %) show a particularly spectacular growth,
whereas turnover in Forward Rate Agreements (FRAs) has remained virtually unchanged (table 4)."

There is nothing subtle here. This CB is switching to Euro's as rapidly as they can. Rather small CB compared to world average but looks closely tied to central government as most of their directors are heavy in banking AND governing experience. Not much diversity of backgrouns and education shows min. Master degrees mostly domestically educated.

the following report on what may and may not have been knowen about 911 adds to the pieces that geo w bush ,etc knew what was going on and they did nothing to stop it.it has all to do with oil and money,and pipielines.the usa gov't has committed treason(this is not the first time,and iam certainly not the first to say that) and should be charged.looks to to me that gold and silver are the only save investments unless you have shares in caryle.

"Oh Lucy! � You Gotta Lotta �Splainin To Do"

IF CIA AND THE GOVERNMENT WEREN�T INVOLVED IN THE SEPTEMBER 11
ATTACKS WHAT WERE THEY DOING?

Bin Laden Met with the CIA in July and Walked Away

by

Michael C. Ruppert

[� COPYRIGHT 2001, All Rights Reserved, Michael C. Ruppert and From
The Wilderness Publications, www.copvcia.com. May be copied and
distributed for non-profit purposes only.]

FTW, November 2, 2001 � 1200 PST -- On October 31, the French daily
Le Figaro dropped a bombshell. While in a Dubai hospital receiving
treatment for a chronic kidney infection last July, Osama bin Laden met
with a top CIA official - presumably the Chief of Station. The meeting,
held in bin Laden's private suite, took place at the American hospital in
Dubai at a time when he was a wanted fugitive for the bombings of two
U.S. embassies and this year's attack on the U.S.S. Cole. Bin Laden was
eligible for execution according to a 2000 intelligence finding issued by
President Bill Clinton before leaving office in January. Yet on July 14th he
was allowed to leave Dubai on a private jet and there were no Navy
fighters waiting to force him down.

In 1985 Oliver North � the only member of the Reagan-Bush years who
doesn't appear to have a hand in the current war - sent the Navy and
commandos after terrorists on the cruise ship Achille Lauro. In his 1991
autobiography "Under Fire," while describing terrorist Abu Abbas, North
wrote, "I used to wonder: how many dead Americans will it take before
we do something?" One could look at the number of Americans Osama bin
Laden is alleged to have killed before September 11 and ask the same
question.

It gets worse, much worse. A more complete timeline listing crucial
events both before and after the September 11th suicide attacks, which
have been blamed on bin Laden, establishes CIA foreknowledge of them
and strongly suggests that there was criminal complicity on the part of
the U.S. government in their execution. It also makes clear that the
events which have taken place since September 11th are based upon an
agenda that has little to do with the attacks.

One wonders how these events could have been ignored by the major
media or treated as isolated incidents. Failing that, how could skilled
news agencies avoid being outraged, or at least even just a little
suspicious?

1998 and 2000 - Former President George H.W. Bush travels to Saudi
Arabia on behalf of the privately owned Carlyle Group, the 11th largest
defense contractor in the U.S. While there he meets privately with the
Saudi royal family and the bin Laden family. [Source: Wall Street Journal,
Sept. 27, 2001. See also FTW, Vol. IV, No 7 � "The Best Enemies Money
Can Buy," - http://www.copvcia.com/members/carlyle.html. ]
Feb 13, 2001 � UPI Terrorism Correspondent Richard Sale � while
covering a trial of bin Laden's Al Q�aeda followers - reports that the
National Security Agency has broken bin Laden's encrypted
communications. Even if this indicates that bin Laden changed systems in
February it does not mesh with the fact that the government insists that
the attacks had been planned for years.
May 2001 � Secretary of State Colin Powell gives $43 million in aid to the
Taliban regime, purportedly to assist hungry farmers who are starving
since the destruction of their opium crop in January on orders of the
Taliban regime. [Source: The Los Angeles Times, May 22, 2001].
May, 2001 � Deputy Secretary of State Richard Armitage, a career
covert operative and former Navy Seal, travels to India on a publicized
tour while CIA Director George Tenet makes a quiet visit to Pakistan to
meet with Pakistani leader General Pervez Musharraf. Armitage has long
and deep Pakistani intelligence connections and he is the recipient of the
highest civil decoration awarded by Pakistan. It would be reasonable to
assume that while in Islamabad, Tenet, in what was described as "an
unusually long meeting," also met with his Pakistani counterpart, Lt.
General Mahmud Ahmad, head of the ISI. [Source The Indian SAPRA
news agency, May 22, 2001.]
July, 2001 � Three American officials: Tom Simmons (former U.S.
Ambassador to Pakistan), Karl Inderfurth (former Assistant Secretary of
State for South Asian affairs) and Lee Coldren (former State Department
expert on South Asia), meet with Taliban representatives in Berlin and tell
them that the U.S. is planning military strikes against Afghanistan in
October. Also present are Russian and German intelligence officers who
confirm the threat. [Source: The Guardian, September 22, 2001; the
BBC, September 18, 2001.]
Summer 2001 - According to a Sept. 26 story in Britain's The Guardian,
correspondent David Leigh reported that, "U.S. department of defense
official, Dr. Jeffrey Starr, visited Tajikistan in January. The Guardian's
Felicity Lawrence established that US Rangers were also training special
troops in Kyrgyzstan. There were unconfirmed reports that Tajik and
Uzbek special troops were training in Alaska and Montana."
Summer 2001 (est.) � Pakistani ISI Chief General Mahmud (see above)
orders an aide to wire transfer $100,000 to Mohammed Atta, who was
according to the FBI, the lead terrorist in the suicide hijackings. Mahmud
recently resigned after the transfer was disclosed in India and confirmed
by the FBI. [Source: The Times of India, October 11, 2001.]
June 2001 � German intelligence, the BND, warns the CIA and Israel that
Middle Eastern terrorists are "planning to hijack commercial aircraft to
use as weapons to attack important symbols of American and Israeli
culture." [Source: Frankfurter Allgemeine Zeitung, September 14, 2001.]
Summer 2001 � An Iranian man phones U.S. law enforcement to warn of
an imminent attack on the World Trade Center in the week of September
9th. German police confirm the calls but state that the U.S. Secret
Service would not reveal any further information. [Source: German news
agency "online.ie", September 14, 2001.]
August 2001 � The FBI arrests an Islamic militant linked to bin Laden in
Boston. French intelligence sources confirm that the man is a key
member of bin Laden's network and the FBI learns that he has been
taking flying lessons. At the time of his arrest the man is in possession of
technical information on Boeing aircraft and flight manuals. [Source:
Reuters, September 13.]
Summer 2001 � Russian intelligence notifies the CIA that 25 terrorist
pilots have been specifically training for suicide missions. This is reported
in the Russian press and news stories are translated for FTW by a retired
CIA officer.
July 4-14, 2001 � Osama bin Laden receives treatments for kidney
disease at the American hospital in Dubai and meets with a CIA official
who returns to CIA headquarters on July 15th. [Source: Le Figaro,
October 31st, 2001.]
August 2001 � Russian President Vladimir Putin orders Russian intelligence
to warn the U.S. government "in the strongest possible terms" of
imminent attacks on airports and government buildings. [Source: MS-NBC
interview with Putin, September 15.]
August/September, 2001 � The Dow Jones Industrial Average drops
nearly 900 points in the three weeks prior to the attack. A major stock
market crash is imminent.
Sept. 3-10, 2001 � MS-NBC reports on September 16 that a caller to a
Cayman Islands radio talk show gave several warnings of an imminent
attack on the U.S. by bin Laden in the week prior to 9/11.
September 1-10, 2001 � 25,000 British troops and the largest British
Armada since the Falkland Islands War, part of Operation "Essential
Harvest," are pre-positioned in Oman, the closest point on the Arabian
Peninsula to Pakistan. At the same time two U.S. carrier battle groups
arrive on station in the Gulf of Arabia just off the Pakistani coast. Also at
the same time, some 17,000 U.S. troops join more than 23,000 NATO
troops in Egypt for Operation "Bright Star." All of these forces are in
place before the first plane hits the World Trade Center. [Sources: The
Guardian, CNN, FOX, The Observer, International Law Professor Francis
Boyle, the University of Illinois.]
September 6-7, 2001 � 4,744 put options (a speculation that the stock
will go down) are purchased on United Air Lines stock as opposed to only
396 call options (speculation that the stock will go up). This is a dramatic
and abnormal increase in sales of put options. Many of the UAL puts are
purchased through Deutschebank/AB Brown, a firm managed until 1998
by the current Executive Director of the CIA, A.B. "Buzzy" Krongard.
[Source: The Herzliyya International Policy Institute for Counterterrorism,
http://www.ict.org.il/, September 21; The New York Times; The Wall
Street Journal.]
September 10, 2001 - 4,516 put options are purchased on American
Airlines as compared to 748 call options. [Source: ICT � above]
September 6-11, 2001 - No other airlines show any similar trading
patterns to those experienced by UAL and American. The put option
purchases on both airlines were 600% above normal. This at a time when
Reuters (September 10) issues a business report stating, "Airline stocks
may be poised to take off."
September 6-10, 2001 � Highly abnormal levels of put options are
purchased in Merrill Lynch, Morgan Stanley, AXA Re(insurance) which
owns 25% of American Airlines, and Munich Re. All of these companies
are directly impacted by the September 11 attacks. [Source: ICT,
above; FTW, Vol. IV, No.7, October 18, 2001,
http://www.copvcia.com/members/oct152001.html. ]
It has been documented that the CIA, the Israeli Mossad and many other
intelligence agencies monitor stock trading in real time using highly
advanced programs reported to be descended from Promis software. This
is to alert national intelligence services of just such kinds of attacks.
Promis was reported, as recently as June, 2001 to be in Osama bin
Laden's possession and, as a result of recent stories by FOX, both the
FBI and the Justice Department have confirmed its use for U.S.
intelligence gathering through at least this summer. This would confirm
that CIA had additional advance warning of imminent attacks. [Sources:
The Washington Times, June 15, 2001; FOX News, October 16, 2001;
FTW, October 26, 2001, -
http://www.copvcia.com/members/magic_carpet.html; FTW, Vol. IV,
No.6, Sept. 18, 2001 -
http://www.copvcia.com/members/sept1801.html; FTW, Vol. 3, No 7,
9/30/00 - www.copvcia.com/stories/may_2001/052401_promis.html.
September 11, 2001 � Gen Mahmud of the ISI (see above), friend of
Mohammed Atta, is visiting Washington on behalf of the Taliban. [Source:
MS-NBC, Oct. 7.]
September 11, 2001, For 35 minutes, from 8:15 AM until 9:05 AM, with it
widely known within the FAA and the military that four planes have been
simultaneously hijacked and taken off course, no one notifies the
President of the United States. It is not until 9:30 that any Air Force
planes are scrambled to intercept, but by then it is too late. This means
that the National Command Authority waited for 75 minutes before
scrambling aircraft, even though it was known that four simultaneous
hijackings had occurred � an event that has never happened in history.
[Sources: CNN, ABC, MS-NBC, The Los Angeles Times, The New York
Times.]
September 13, 2001 � China is admitted to the World Trade Organization
quickly, after 15 years of unsuccessful attempts. [Source: The New York
Times, Sept. 30, 2001.]
September 15, 2001 � The New York Times reports that Mayo Shattuck
III has resigned, effective immediately, as head of the Alex (A.B) Brown
unit of Deutschebank.
September 29, 2001 � The San Francisco Chronicle reports that $2.5
million in put options on American Airlines and United Airlines are
unclaimed. This is likely the result of the suspension in trading on the
NYSE after the attacks which gave the Securities and Exchange
Commission time to be waiting when the owners showed up to redeem
their put options.
October 10, 2001 � The Pakistani newspaper The Frontier Post reports
that U.S. Ambassador Wendy Chamberlain has paid a call on the Pakistani
oil minister. A previously abandoned Unocal pipeline from Turkmenistan,
across Afghanistan, to the Pakistani coast, for the purpose of selling oil
and gas to China, is now back on the table "in view of recent geopolitical
developments."
Mid October, 2001 � The Dow Jones Industrial Average, after having
suffered a precipitous drop has recovered most of its pre-attack losses.
Although still weak, and vulnerable to negative earnings reports, a crash
has been averted by a massive infusion of government spending on
defense programs, subsidies for "affected" industries and planned tax
cuts for corporations.
Now, let's go back to the October 31 story by Le Figaro � the one that
has Osama bin Laden meeting with a CIA officer in Dubai this June.

The story says that, "Throughout his stay in the hospital, Osama Bin
Laden received visits from many family members [There goes the story
that he's a black sheep!] and Saudi Arabian Emirate personalities of
status. During this time the local representative of the CIA was seen by
many people taking the elevator and going to bin Laden's room.

"Several days later the CIA officer bragged to his friends about having
visited the Saudi millionaire. From authoritative sources, this CIA agent
visited CIA headquarters on July 15tth, the day after bin Laden's
departure for Quetta�

"According to various Arab diplomatic sources and French intelligence
itself, precise information was communicated to the CIA concerning
terrorist attacks aimed at American interests in the world, including its
own territory."�

"Extremely bothered, they [American intelligence officers in a meeting
with French intelligence officers] requested from their French peers exact
details about the Algerian activists [connected to bin Laden through
Dubai banking institutions], without explaining the exact nature of their
inquiry. When asked the question, "What do you fear in the coming
days?� the Americans responded with incomprehensible silence."�

"On further investigation, the FBI discovered certain plans that had been
put together between the CIA and its "Islamic friends" over the years.
The meeting in Dubai is, so it would seem, consistent with �a certain
American policy.�"

Even though Le Figaro reported that it had confirmed with hospital staff
that bin Laden had been there as reported, stories printed on November
1 contained quotes from hospital staff that these reports were untrue.
On November 1, as reported by the Ananova press agency, the CIA flatly
denied that any meeting between any CIA personnel and Osama bin
Laden at any time.

In the most ironic twist of all, FTW has learned that Le Figaro is owned
by the Carlyle Group, the American defense contractor which employs
George Bush Sr., and which had as investors � until they sold their stake
on October 26 - the bin Laden family.

Who do you believe? In coming stories FTW will prove to you that this
war, which according to Dick Cheney, may not end in out lifetimes, has
been in the works for at least four years.

These countries should publish figures on their use of derivatives contracts to clarify the costs of borrowing to finance their budget deficits --- Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden, and the U.K.

Countries should provide statistics on what they do with derivatives, or financial instruments derived from debt, equity or commodities, according to a report by Gustavo Piga for ISMA, the 570-member trade association for the securities industry, and the Council on Foreign Relations, a research organization.

``Sovereign borrowers' arguments for withholding information on derivative activity are often either irrelevant or specious,'' said Piga, an economics professor at the University of Macerata in Italy, in the study.
Banks must report their holdings in the $95 trillion derivatives market to the Bank for International Settlements, the world banking watchdog owned by 50 central banks. Countries aren't required to say how they use them.

European Union countries are required under the Maastricht Treaty to keep the ratio of their deficits to gross domestic product to below 3 percent.

Traders use derivatives contracts to guard against swings in interest rates, currencies, or stocks. Governments can use them to lower their borrowing costs and reduce the average length of time before their debt must be repaid.
France, for instance, expects to save 200 million euros in debt costs next year by using swaps to reduce the average maturity of its bonds, the finance ministry said in September.

By revealing the details of the swap agreements countries can clarify the amount of interest they owe on their debt, Piga said in the 150-page report.

Countries are using more derivatives, Piga said, particularly interest-rate swaps. Swaps are agreements to exchange interest payments, such as a fixed for a floating rate.

Piga estimates that the 14 countries he studied had swaps with a face value of 180 billion euros ($163 billion) at the end of 1999. It's not possible to separate how much countries use swaps from the BIS category of ``non-financial customers,'' though those institutions account for $4.315 trillion of swaps, he said.

BR-Finally, someone agrees with me that the world CB's are manipulating their books with derivatives to the extent that they need to honor some sort of accounting or reporting standard, similar to the GAAP standards used in the U.S.

The above mentioned CB WEB sites are difficult to navigate and even more difficult to ascertain the extent of derivative activity. European CB's do not publish Gold activity and that makes it difficult to find out whether they are leasing, selling Gold short, or using SWAPS to bolster their balance sheets and manipulate the POG.

Again, more substantiation, that the CB's all over the world are equally corrupt when it comes to manipulations for their own betterment and the concealing of financial activities in their public reporting.

Wake up out there world, your local CB's are taking your pants off while you are focused on and blame the world's economic problems on the U.S. Federal Reserve.

Leigh, you are correct and win the silver. Gold Trail Msg# 117 is the one that made the Quarterly Review and our first entry in the "Best of the Gold Trail" series, and since you chose for precisely the same reasons we did per below, you win the gold as well.

-------------
This simple thinker, though appreciative of Trail Guide's efforts to educate us in economic
theory and world economic practice, has an eye on her own little portfolio. How can it be
adjusted to guard her family's small wealth now and in the future? That is why when each Gold
Trail message comes out, I click over and search for clues. Message 117, which contains
answers to questions from MK, gives a number of practical hints:

"The leverage today will be in a physical gold position, not any other form of gold ownership.
By accumulating gold today, we are truly walking in the footsteps of giants, advancing with
them as they work thru this singular, long term political move."

"While a U.S. physical gold free market will be locally encouraged, it will most likely simply be
a shadow function of Euro Gold practices."

"I also expect a European gold coin to become real usable legal tender (not a collector item) and
be named the 'EuroLand.'"

"A U.S. workout to cover its failed paper gold position will most likely be using gold industry
profits. It could be done via 'windfall tax legislation,' plain tax or part of any variety of
emergency financial arrangement. All built in order to allow our current gold reserves to be
repriced at higher world levels and help our dollar stay somewhere in the next currency system.
Considering the size of the failure, real gold will outperform any and all investments once this all
gets started. However, we should not be naive and not expect some serious taxes of our own on
bullion sales. Still, only just enough so as to keep currency tender protected from being
supplanted with illegal gold use. Illegal in that too high a rate and everyone would use gold in
barter and stop paying their capital gains taxes all together."

Leigh- good work! Another way to protect and increase your family's wealth is to collect as much gold and silver from USAGOLD contests as possible. Congrats.
Has anyone any word of how the GATA case was received (or not) by the court today????
Whatever the outcome, my thanks to all those supporting the efforts in any capacity.
Rich

Thank you much, your post #64733 was quite an appetizer. Where do I find Marcus Angelicus at Gold-Eagle and does he have much more of this nature? There is a very good reason that I keep a file handy of much of your posted wisdom, you too Belgian!

Go to Daily Market Report here at Usagold, then click on "Gold Price Fixing" for a CBS Marketwatch report.
Basically, the judge was not overwhelmingly convinced but hasn't decided to discard it yet. He also wonders IF some of the defendants can be brought to court to face any charges. I would have thought this might have been an immediate concern and one that the judge would have resolved by now. Silly me, why should I think there is any competency in our legal system.
So we wait some more.
Rich

CBS Marketwatch posted a short article about the hearing
today on the GATA suit. In brief, the judge dismissed two
counts against JP Moron, and would rule later if the case
would be allowed to proceed.

The CBS commentary was not optimistic about the case going
forward, but then these guys have always a real hoot with
their reporting on Gold; "Gold tumbled $0.30 today in panic
selling", or "Gold inched ahead by $15 today in quiet, lack-
luster action" :^)

Our Gold-Eagle neighbors have also found the same Marketwatch report but are still wondering why there is no word from GATA. Some have speculated that the court may have instituted a gag order. Even if this were true, wouldn't Chris Powell still be able to tell us that this was the case? I'd like to hear what happened from as many sources as possible.
Also, what sort of move will we see tomorrow from the Greenman and the FOMC? And, how will the stock markets and the dollar react to whatever happens? How low can rates go before the dollar weakens?
Rich

The most important theme, which interests many most famous politicians and banking circles, engaged in the discussion of these issues and confirmed their participation at the Reception, is "Substitution of the U.S. dollars with Euro in internal circulation of Russia".

Presence the representatives of Arabian and Asian countries as Honoured guests underlines the equal adherence of Russia to cooperation with all interested countries, and the significance of Russia's meaning for Europe as transport and multimedia corridor when working with Asia.

Themes for the discussion
-Russia's integration into European financial system and the development of interbank cooperation and correspondent relationships.
-Removal of the sphere of payments for products and services from the dollar zone to Euro on the territory of Russia.
-Shifting European foreign contracts of Russian companies to Euro.
-Investment attraction from Europe to Russia - new proposals in the process of privatization.
-European investment funds - principles of functioning at the unified area. The most attractive objects - for investments from Europe.

Oh yeah, sorry but....US DOLLARS are NOT ACCEPTED

Sir Trail Guide: Thanks for all your thoughts and efforts,
they are very much appreciated by a great many, I'm sure.

Excerpt:
"During times of war, the government usually runs a budget deficit as it spends more than it takes in taxes. The added stimulus through deficit spending and the monetization of debt creates inflation. It is this fear of inflation that has kept long-term interest rates from coming down. Unable to bring down interest rates the Treasury has intervened by its decision to stop selling 30-year bonds. ... With the economy worsening, the Fed is flooding the market with money in an effort to meet a rise in the demand for money from companies and investors who are showing an increase in preference for liquidity. This would normally raise the cost of money. By shrinking the supply of bonds, or in other words, by limiting their sale, the government is trying to lower the cost of money, by driving down its price."

"In a changing world, a new way to wage war........That means divesting ourselves of old-fashioned "legacy forces" and adopting "new concepts of war-fighting, new capabilities and new ways of organizing our forces" to face the dual challenge of liquidating terrorist networks and preparing for future threats."

Part of that preparation on an individual basis surely involves taking a more responsible and conservative stance with respect to the risk-exposure of financial positions.

In this piece, Jensen also replies to the question from a reader: "Why can't the United Nations send a peacekeeping force to make Israel and the Palestinians quit fighting?"

(5 November 2001) Effective Nov. 1, China will implement a new system for regulating gold retailing....
----
Liberalisation of the gold market in China continues, with greater reforms in the market targeted for January 2002.

http://www.gold-eagle.com/gold_digest_01/stott110701.htmlInteresting piece, but forget the bit about China, most of us know the PRC refine from imported Ag concentrates. - Netking
Snippet:
". . . . If this is so, then why are 100 ounce silver bars in short supply? Why is the US Mint acting very hedgy about how much silver it can lay its hands on for continued production of US silver Eagles? Beautiful A-Mark silver rounds, which used to go for fifty cents over spot are gone, and now American silver Eagles have risen in price over the last week by a quarter. No one even hints that the US government has a single ounce of silver as a reserve, because it probably doesn't . . . "
------------------------------------------------------------
Well done Leigh, you silver bug you!(smile)

http://www.save-a-patriot.org/files/view/whofed.htmlThis is exactly what I mean when I say "All roads lead to..................London".
This was dredged up by a friend at cafe Chat and fits very nicely w Pandagold's # 64733.
Suggestion: Copy this and keep handy for eternal reference.
We must stop thinking in terms of Alan Green$pandex and the various marionettes he well represents, and look deeper to the masters behind the scenes.
Don't you think EVERY American should KNOW who is represented by the policies, personnel and actions of our Fed? I do. Who has the foggiest {ha} clue that this isn't even a Federal Govt entity? It is also not a 'Reserve'. Much less who owns/controls it.
This article, put together with Pandagold's #64733 speaks pretty loudly about US/Brit/French connections via the Rothschilds just for starters. How many banks are 'nationalized' as Sir Belgian states his country's has been? He also states it really doesn't matter much, because CONTROL is actually just as effective as ownership. We link 'London' to S.A., which isn't very hard to do, or Canada, Australia etc., and the picture clears: MACROVISION!
There is common talk of 3 or so dynastic families that lord it over the rest of the world. Can I say Rosthchilds, Rockefellers, and Oppenheimers {?} w/o causing a scene? Who else would come to mind for other foolhardy and curious souls that might venture a guess?
Know your enemy, golden dreams!
auspector

It seems to be a undecided outcome 'vibe' here. Even though the 2 charges against JP Moron were not allowed to proceed, there is still the small matter of the other 'defendents'. It would seem to offer a glimmer of a chance, no?

If this is so, then why are 100 ounce silver bars in short supply? This is an odd question to my mind. What size bars would a company buy (like Kodak, for example) use vs. the best size for storage and a liquidity size compromise for you and I. That's easy. Industrial demand is for granules (Europe) or 1000 oz bars. The rest of the refined silver would be in smaller weight sizes of more interest to investors. The dearth of 100 ozers would seem to imply that dealers are now running out - and refineries must wait for the increase in demand from dealers to start a new run of production.

Given the low paper prices, that demand is now oh so slowly showing up.

The supply would vary, obviously, regionally with New Zealand, for example, not swimming in the stuff.

If you phone a refinery about 100 ozers they will ask you how much you want (knowing that it likely isn't 50 million oz..). They seem to be waiting on the demand.

And additional: China is importing silver from Australia etc. for re-refining and "exporting" it back. There's the source of the silver dishoarding by China. Lotsa silver bugs in China.

Credibility involves such elements as that portion of an overall system (distinctly NOT in effect in the current dollar system) which allows for the pricing of gold to seek its proper level -- reflecting, concurrently, the scarcity of physical gold and the abundance of currency in an affluent society of uncertain and shifting aggregate creditworthiness.

In this light, 'price stability' should be seen as referring not to maintaining the singular price of gold (which must surely be expected and allowed to rise markedly through the coming transition), but to the level of prices on market goods and services in general.

It incrementally points toward something that you have seen described variously over time here at this website by some knowledgeable posters as "free gold".

"Argentina said it will offer holders of $60 billion of bonds new securities that have longer maturities and pay lower interest.

The exchange, which rating agencies say would be tantamount to a default, is aimed at domestic bondholders. The new obligations will pay a third the interest of the old debt and mature three years later, Economy Minister Domingo Cavallo said. The government will provide more details Tuesday and later announce another swap targeting international holders.

Argentina plans to restructure at least $95 billion of bonds to regain investor confidence and reduce financing costs to start reviving the $280 billion economy. The country needs to reduce the amount of outstanding bonds by as much as 47 percent to be able to pay its debts, economists said.

``The only thing we are seeking is to ensure payments over a viable base,'' Cavallo told business executives at the state- owned Banco de la Nacion. ``It's a question of telling the truth.''

BR-Yeah, right. The truth are what these CB's are known for around the world.

"``Individual investors are not likely to go for this,'' said Rafael Ber, an analyst at Argentine Research. ``The banks are under pressure to do it.''

Ratings companies have said that any exchange that reduces the value of investors' holdings would be considered a default. Investors have said a plan to back new securities with tax guarantees may give bonds not included in the swap a lower priority when the government pays its bills. "

BR-Default? No, it can't be. Not for the 10th time? I guess this buys time for Goldman and JPMC to off load their losers on some unsuspecting investor at some price. The funds at the IMF must have dried up.

JPM/Chase.....alas, too convoluted, too hard to connect the dots for a mere Judge (who probably has a loan with them).

Ahhh, but what of the man who claims "Central Banks stand ready to lease gold should the need arise"? Surley the true intent in this outlandish statement deserves carefull judicial discovery. Unless of course he is above the law, which is probably what the Judge is checking into.

*********

We are witnessing market intervention at historic levels, yet no one sees or cares to understand, much less call to attention as it might be 'unpatriotic'.

Reminds me of Clinton's obscene behavior which far too many saw, yet refused to condemn for fear of confusing character with ability.

And so we wander deeper into the lowlands with our highly valued, very very expensive, selective vision glasses. Which we put on a convenient payment plan through the hot new, highly leveraged, Moral Relativism Trust Co.

We are told: no more moral hazzards. All debts paid free of charge, no consequences or penalties.....ever again.

auspec(64770) - Great work work McAuspec(tor) on THE FED "ownership" . . . when you finish the project you can reveal to us the owners of the others too, as far as the clan can see yes . . . but are we all ready for those answers?(rhetorical).
- Netking

Not much in the way of news tonight. CISCO beat the street by 2 cents (Pro Forma). This is on lowered earnings by about 76%. This quarters losses are a mere $286 million excluding writedowns. CISCO should only loses a billion or so dollars this year. Go CISCO!

The markets took the news quite well as techs rose smartly in after hours trading. Who said "Irrational Exuberance" was dead? Meanwhile, the market awaits the FED's rate cut tomorrow. This could be a double-edged sword. If the cut is only 25 bps, then there might be disapointment that the cut wasn't larger. If the cut is 50 bps, then the market players might wonder if this is a move out of desperation. Then again maybe Amazon.Com or some other tech wreck stock will beat earnings by penny (Pro Forma) and lose a mere billion or so dollars along with an announcement that they will add to the "Bone Pile" and it's off to the races as "Irrational" investors throw cash at the market. Hmmm...

"Investors in India's government bonds have earned an average of about 19 percent this year, according to the total return index calculated by investment bank ICICI Securities and Finance Ltd., the highest since 1997. The benchmark Mumbai stock index has tumbled 23 percent in the same time. "

``As long as the RBI and the government of India keep accommodative conditions, bond yields will fall,'' said Dhawal Dalal, who has been buying three-year and 10-year bonds for the 16 billion rupees of Indian debt he helps manage at DSP Merrill Lynch Investment Management Co. "

So much for the post I did on the Bank of India Central Bank earlier. BOI are going into hock big time in cahoots with M-L.

They're all crooked, I tell ya�. Will they be forced to renegotiate that 19% bond interest rate via "default?"

If you are crazy enough to buy some high risk CB bonds, would you buy the Indian Bonds at 19% or the one's being offered at Argentina's new rate of 7%? (Given that India has not defaulted 10 times akready)

The more that I look at who runs these CB's, the more convinced I am that it does not matter. The real question is�are the Central Banks use of derivatives going to bring the world economic system down? Regardless who are running the CB's, the result will be the same.

You can buy a lot of phyical Gold with this CB "paper".

BR549

BTW-The only thing dirtier than the CB's perhaps, is the NY Mayoral race. I get the NYC Channel on my dish and the name calling is second to none between Green (he's really pink) and no-Gold Bloomberg.

Ford Motor (nyse: F) is considering shedding up to 20% or 8,000 of its salaried U.S. white-collar employees as part of an overhaul of its North American operations, according to the Financial Times. Details of the layoffs will not be announced until early 2002, but Ford is reportedly hoping to save $1 billion through reductions in its white-collar staff.

Black Blade: The "Bone Pile" continues to grow daily. BMC and SBC announced additional layoffs today as well. This is not a sign of a robust economy - or is it? In a word - "GRIM"

http://www.ffo.ru/stock/eindex.htmlThe FFO has a broad collection of politicos and yes men economists to pat them on their intellectual shoulders and tell them that "political will" will triumph over the laws of economics. They promote an emotional anti market Mahatir-like attitude and forecast the destruction of the US economy. Invited dignitaries in the FFO's include mostly economic academics who hope to be the central planners of the future, a menagerie of ambassadors, and the occasional law firm.

Oddly, they did not invite many people from the private sector nor did they discuss much those issues that most affect investment.

Only a couple of the people in the confab had anything positive to say about the US economy or the US in general.

Speculation as to China's gold stock put it as up to 15,000 tonnes.

At this meeting, no one for a second stopped to think that countries do not trade with each other but people and corporations do. The whole of their discussion was of government's actions to "build the economy". None pointed out that if a step was taken by government it would be precisely that which people did not think worthwhile, otherwise, they would already be doing it. None stopped to say that government allocation of resources removes them from people's use in their daily pursuit of profit, and therefore government action in the economy begins by eliminating future growth (all of which comes from profits - having more than what you started with), and ends with the waste of the resources.

An efficient government can achieve the same results by taking a percentage of each person and company's production and dumping it into the sea. That would greatly reduce labor expenditure in government.

Here are people they pointed out as "partners".

General Manager Arab Research Center Dr. Ali D. Al-Shamali

Plenipotentiary and Extraordinary Ambassador of the Republic of VenezuelaLopes Mieres Francisco

The private investor Munir Al Debs

Plenipotentiary and Extraordinary Ambassador of Republic of Indonesia John Ario Katili

Plenipotentiary and Extraordinary Ambassador of the Republic of Malaysia Datuk Yahya Baba

Needless to say, the presence of many representatives of economic basket case weavers is a demonstration of the quality of thinking behind the "political will".

Distressed bonds are really nice. The restructured Argentine bonds at 7% will be sold in the aftermarket by their current holders, having already realized a 40% loss from par. Once the debt is restructured to 7-8%, the bonds at a 40% discount would have an effective yield of 12% and enjoy US and IMF guarantees. Which comes down to not bad at all.

In general, debt service in EMs is about 14% at the moment, vs. 11% in prior years.

To quote from contract specifications (per link); "Deliverable Grades Refined silver assaying not less than 999 fineness and made up of one or more brands and markings officially listed by the exchange. Each bar must weigh 1,000 troy ounces. The total bar cannot vary from a 1,000 troy oz weight by more than 12 percent"

. . . which means that those who do take delivery and pay for 1,000 and may get as a little as 880, the shorts would have to call that a "discount"(bad joke I know!). To me the 100 oz's being sought & going first indicates a strong retail demand, this is good & will have a ripple effect.

As for us down here . . . the latest this week from the Ag suppliers; "We are expecting strong demand on silver until after Christmas please give us a call back then" . . . wonder what's different about "this Christmas". I have a feeling it will not be too long before "things happen", most reliable market timing except "Claytons seems to indicate Oct-Nov 2001 as a major bottom for the POS, but I guess we shall see. I think the name of the game is to keep buying physical, if per chance you get to buy it a little cheaper for the very short term then that is good too.
- Cheers Netking

Washington, Nov. 6 (Bloomberg) -- Federal Reserve policy makers, meeting today, may reduce the benchmark U.S. interest rate to 2 percent in order to fortify an economy almost certainly in recession. Fed Chairman Alan Greenspan and his fellow central bankers will probably cut the target rate on overnight loans between banks a half percentage point from the current 2.5 percent, according to the
median forecast of 85 analysts surveyed by Bloomberg News. A drop in the overnight rate usually pushes down rates for mortgages and business loans -- help for an economy that shrank at a 0.4 percent annual pace in the third quarter, the first narrowing since 1993. Economists expect it to contract again in the final three months of the year, and the Fed is seen as the last line of defense to give the economy a lift. Even after lowering rates nine times this year, the Fed still needs ``to arrest sliding investor and business confidence and prevent the recession from getting worse,'' said Sung Won Sohn, chief economist at Wells Fargo & Co in Minneapolis.

Black Blade: This does not look like a bustling robust economy by any measure. Higher unemployment, terrible NAPM numbers, low consumer confidence, cash withdrawals from Mutual Funds accelerating, and growing consumer and corporate debt. In a word - "GRIM"

The group discussed whether the exhortation by the Russian minister to his people to dump their Greenspan-backs in favor of euro-dims (which was very badly received among Russians, who generally suspect anything said by a government official as to what is good for their finances) would have a substantial impact on the euro-dollar exchange rate. Why? because they thought the $60 billion of internal circulation dollars in Russia could have an effect on exchange rates.

Someone at the Mises Institute pointed out that the strict bank disclosure rules for exchange of old currency to new currency would cause people who have some $250 billion of cash from sources they would rather not explain, to do two things: spend the money rather than exchange it, exchange it for dollars.

I bet the recent bout of price rises and GDP growth in Europe has much more to do with a last minute "use it or lose it" spending spree than any development of a lasting nature in the economy. As the conversion date nears, we may find fewer people left who have not spent or exchanged their old currency, and the EU economy could very well tank by Christmass.

A small bit of an observation, in this May 2001 meeting, a war in the Afghan-Pakistan-India triangle was treated as a fait accompli.

Why are you stubbornly refusing to accept that the euro's aim is to achieve as much as possible "stability and growth" ? This political will, must be clear by now ?
Economic reality is also visible : emirates are buying airbuses, etc... ! And why should Russians hold dollars ? Moskou/Brussels, historical and natural links, have always been more evident than New York/Brussels.
A lot of emotions are there, still to be digested, for the changes to come on the euro and dollar as well.

Panda le Baron de Gold : Could it be that the Rothshild's and brotherhood, are positionning themselves with the yellow in anticipation of that tremendous dollar>>euro shift, in (slow) progress ? View
Yesterday's Discussion.

So why don't we see museums full of silver specimens? The reason underlines the key difference between gold and silver. I heard someone say last week that all of the gold ever mined in human history, if melted down, would fit in a box 100 feet by 100 feet by 100 feet in size. The vast majority (well over 90 percent?) of this gold still exists and is highly cherished as valuable specimens, coins, jewelry and bullion.

In contrast, although the amount of silver mined throughout history is much larger; the vast majority of silver has been used. It has been literally consumed in a myriad of applications and is now gone. Only a small fraction of mined silver still exists as specimens, coins, jewelry, bullion etc. But silver plays a role in nearly every aspect of our daily lives. So in many respects, we live in a silver museum. . . "

http://dailynews.yahoo.com/h/nm/20011106/bs/economy_us_friedman_dc_1.htmlROME (Reuters) - Influential U.S. economist Milton Friedman believes Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) has made all the right monetary policy decisions since the Sept. 11 attacks and says the U.S. economy could even rebound soon.
Countering recent criticism of the Fed chairman, who has cut interest rates aggressively since the attacks and is poised to do so again on Tuesday, Nobel Prize winner Friedman said Greenspan had done the right thing.
``What he has done is without precedent (and) he has acted with anticipation,'' he told Il Sole 24 Ore newspaper in an interview published on Tuesday.
``He could even achieve his goal of a soft landing... The elements for a rebound are already there and maybe even in the second quarter of next year we will see the results,'' he said.
Friedman said the key to avoiding recession was pumping more dollars into circulation, which the Fed had done by buying bonds and other market operations. He estimated there had been a 10 percent increase in money supply since the start of the year.
``It's true that the unemployment rate could rise to 6.0-6.5 percent, but we shouldn't forget that unemployment is a lagging not a leading indicator of negative conditions. I don't think we'll hit 8.0 percent as in other recessions,'' he said.

THE European Union has said that it knew at the time that Italy had used one-off financial derivatives to help it to qualify to join the euro in 1997 but said that it did not matter. Romano Prodi, who had the benefit of the ruse as Italy's Prime Minister, but is now President of the EU, insisted that Italy had not cheated.

The admissions follow hints by an Italian economics professor that his country had financed spending by raising loans in Japanese yen in the mid-1990s to make it appear that it paid less interest than lire borrowing would cost. The yen were swapped into lire for the three-year length of the bond but the cost of buying the swap from an international bank did not need to be disclosed.

The yen bond was one element in a daring plan for Italy to halve its budget deficit to 3 per cent of output to meet the Maastricht tests for euro membership. A one-year euro tax was levied in 1997 on the promise of swift repayment.
The Bank of Italy was also a big backer of Long Term Capital Management (LTCM), the US hedge fund. LTCM bought Italian bonds on an heroic scale in derivatives deals, cutting the interest premium Italy had to pay.

Gustavo Piga used the unidentified yen loan story in a paper, Derivatives and Public Debt Management, for the International Securities Market Association (ISMA). It urges the EU or the European Central Bank to force disclosure of official derivatives deals to cut abuses. But the paper brought embarrassment. Professor Piga cried off a planned public launch today and the ISMA removed his paper from its website, where it had been displayed.

Government Sponsored Enterprises (GSEs) or also known as Federal Ageny Securities like the Federal Home Loan Mortgage Corporation are privatly owned chartered entities established by Congress just like the FED. GSE's offer greater spreads versus similar maturing U.S. Treasury Securities and have replaced the 30 year Treasury Securities.-----Central Banks stand ready to lease gold should the need arise = Central Banks owners stand ready to lease public's gold and the gold still in the ground should the need arise in order for them to buy it cheap to establish a world TRADE currency using e-gold. The Rothschilds through the LBMA operations they control, are cornering the world's gold supply for that very purpose. Greenspan is helping them. The idea is to enrich word trade with one common currency. This currency will not be used for paying your bills like income, property taxes or your other bills like power, phone, food, mortgage and credit card bills. EU economy like our economy will tank in order to usher in the NWO where each country's FED becomes the government. We are alredy basically there. Truth be told the FED is our government. We the people as voters may even loose the option to vote for the least evil canditate. Not much of a loss. I thought Bush was less evil then Gore but now wish Gore was president. Either way we are screwed.......We the poeple are monetized by our debt. A new form of financial slavery...

Yep, again on the DEBT-TRAP. But this time with the zero-rate, double trap. Global contraction is the result of the strangulating debt that is being countered with cheap-cheaper, refinancing. All available money is sucked into this "huge" debt black hole. Totally unproductive in this complete mismanaged and overextended economy. It is of no use "anymore", to decrease the debt burden with the available easy money. The imbalance between debt and profit, went much too far. Debt must be repaid with profits and not wit easy money roll-overs (refinancing)or any other hokus pokus. If the global contraction doesn't stop and reverses, much more money will be made available, not to service debt, but to restart the economy. Getting the unemployed back on a job. And this amount of money will be huuuuuuuuuge.

It is an illusion to think that once the debt burden has been relieved to acceptable proportions, the economy and employment will quick start, automatically. Once, rates are permitted to reach that zero target, everyone has adjusted the japanese way. The cyclic momentum of expansion has been broken. Consumers and investors, who survived the prolonged contraction, went into a lower gear and feel comfortable in it that particular speed.

Could it be that we landed in this situation, because of the dollar being challenged by the euro ? The dollar, having a anti-euro policy and seduced to take the wrong decisions on the pure economic front ?

Had LOL with your posting on (Nobel) Friet(d)man. He, as many others, are just "talking it up" (the economy).
So much analogy between global economy and the fate of SABENA (Belgian airline bankruptcy). Artificial employment for all these years (25) and money, sorry paper, vaporized, just for the sake of keeping it up (in the air). The restarting of a mini airline with lower paid staff in a global contraction environment, is not exactly, what we call, a gigantic relance of the economy. Flying around is an expensive activity and the efforts to populise it, failed dramatically. Price inflation as adjustment to permanent depreciation had to be prevented at all cost. And now the bill has come : 6.000 (or more) redundacies.
Friedman or not, other desasters will follow. Because they want all the butter and the money of the butter. Impossible !

"For all its alleged great powers, the government cannot stop this recession. The government and its wrongheaded policies are responsible for this economic calamity, not the hijackers who murdered several thousand people, as dreadful as that act was."

William Anderson explains why traditional monetary and fiscal maneuvers may prove impotent this time around! For an "Austrian" perspective of the current troubles, please check out Dr. Anderson's latest thinking at THE GILDED OPINION!

I did not know about the variability in sizes for the 1000 oz bars. But I cannot speculate as to how this would impact on industrial demand for these sizes. One would think it would matter a lot, but if their wasn't demand for this size, why would they make them - in spite of the potential "shorting" (couldn't resist) of up to 120 troy oz per...? A jewellry manufacturer would make approximately $2000(US) more on 120 oz (based on a 5 fold mark-up of the wholesale to retail sale). But I suspect that the discount is also factored into at the source cost - and the buyers from the refineries (can afford to) always feel lucky about the odds. (smile)

Kodak, however, in buying film silver for refining would perhaps have a different opinion... Maybe.

Upon re-reading my original post I also noted an ambiguity around my use of "demand" that I will have to watch in future. I used this in the sense of a realization of demand in the form of orders to refiners. Style over content.

There IS a reason one doesn't see as much silver in museums. The first reason is that museums tend to have on hand specimens of silver and cold that somewhat reflects the importance in the jurisdiction of location. A silver producer country usually does have a lot of silver on display in museums - and even elsewhere. I live in Ontario Canada, as you may know, and the Royal Ontario Museum in Toronto has a spectacular display of native silver within its walls. Just a short walk down the way lies Queen's Park, the provincial legislature buildings, and here to one can see at least one large block of native silver on display. A visit to Cobalt, Ontario in the north of the province will reveal a whole museum dedicated to silver - with even more spectacular sights. The National Museum in Ottawa has an excellent display. I know because I sold them some of it (smile).

But there are other reasons for the dearth.

Native silver (elemental) in the country rock is actually rarer than gold. Most of the metal mined is combined with sulphur and it is not the pure metal. Silver is highly reactive to sulphur and hence the geological environments where it forms create great odds against elemental ores happening. Native silver is a rare elemental mineral - much rarer than native gold.

Native silver specimens demand very high prices - similar to gold - by collectors. The public generally doesn't have a clue.

As an ore mineral silver in elemental form is not often particularly attractive in comparison to gold. It is often harder to see - and is usually tarnished. Gold looks better.
However, I possess about fifty kilos or so of native silver from Cobalt, Ontario (I am a mineral collector of years) and when one slabs large vein sections of highgrade material and then puts a polish to it, the sight is breath-taking. It often looks like frost on a window pain.

Jewellry: I have made jewellry from this material. Twenty years ago slabbed material (sliced in <1/4" thickness) for making jewellry would cost in inflated adjusted dollars over $20 per inch in Canada. Much more in the United States.

Now, this material has almost disappeared.

The reason silver isn't seen very much in museums is because it is harder to find. Most of the material is now in museums or private collections.

For example, in countering Roach's deflation arguments, FOA would probably cite loss of reserve currency status and breakdown of markets like paper gold. Is that something that mainstream economists just cannot address? Everything in their world assumes structures remain as is, and only the statistics within them change?

ORO (msg#: 64788)---" Distressed bonds are really nice. The restructured Argentine bonds at 7% will be sold in the aftermarket by their current holders, having already realized a 40% loss from par. Once the debt is restructured to 7-8%, the bonds at a 40% discount would have an effective yield of 12% and enjoy US and IMF guarantees. Which comes down to not bad at all."

When you say "not bad for all", you must mean not bad for all of the fat cats who bought these high risk instruments because they paid a corresponding extraordinary high rate of interest. According to the article and others that I have read, when bonds are restructured in this manner where the exchange unilaterly reduces these bonds holdings would be considered a default. The Argentina government desperate to get out of this quagmire will "...sell new bonds backed by tax revenue. By offering loans instead of bonds in the exchange, the government said it found a legal loophole around the restriction.�. ". So the Argentina taxpayer ends up stuck with the financial manipulators malpractices and assumes their burden via this risk transfer.

The initial benefactors are not individual investors but their internal domestic bondholders. If you look at the Argentina CB, JPMC and others who are intertwined, I am sure these manipulators are put into this category.

What possible reason would the World Bank have for guaranteeing these bonds when Argentina has a long track record of not honoring its debts and a string of defaults. I think that we all know the reasons---this is nothing other than a "bailout" of sorts for the high risk gamblers that buy these instruments.

The thing that I am finding in research into derivatives, that other CB's are utilizing these practices in this same sort of way to hide their true financial status. More on this in future posts.

Distressed bonds are an indication of the irresponsibility of the issuer and a their future credibility. Burned once, your fault, burned twice�(or 10 tines). This activity when condoned by organizations such as the world bank shows how fragile the derivative and manipulative CB's house of cards really is.

Would you buy these new bonds now as an individual invesotr as opposed to the Bank of India's bonds at 19%? What would keep B o Argentina from unilaterally reducing the new interest rate from 7%. I know the guarantees.

Do you condone this sort of activity by CB's?

Stealing from the people by the fat cats is still stealing, regardless of how expensive the pin striped suits they wear are.

no i cannot do better,this is not my ball to run with.it is a very difficult case and that is why their should be more than one person running with it.if it is such a big deal then why only the one person,is it money etc.i was under the impression their was a team of lawyers from philly.
i have no more to say on htis .

The merger of Commerzbank's Rheinhyp, Dresdner's Deutsche Hyp and Deutsche Bank's Eurohypo would lead to annual savings of 120 million starting in 2004, the banks said in a statement to the Frankfurt exchange. The bank will be called Eurohypo . . . "
------------------------------------------------------------
Looks like something we'll see much more of, particularly now in the present & days ahead as earnings have come under pressure. The name? . . . will leave for our "Euro Bug" buddies to comment on that one!
- Netking

As we all know, the FOMC meets today to decide on the appropriate fed funds target rate to deliver monetary policy commensurate with economic conditions and political realities of the day.

When the Fed's NY Desk entered the open market yesterday to conduct policy operations, it came as no surprise that the $3.5 billion added through overnight repos was provided at a stop out rate just a shade under the current FOMC target of 2.5 percent.

More revealing is the 28-day term repurchase operation used to add $3 billion to banking system reserves. The stop out rate for various collateral accepted by the Fed (in line with the highest bids submitted by market participants) was only a shade over 2 percent, ranging from 2.09 to 2.16.

From this, it would seem that those in the best position to know what's what are expecting a 50 basis point rate cut at the conclusion of today's meeting.

Easy money just keeps getting easier. Your portfolio will require gold to survive the inevitable day of reckoning for this great money giveaway.

BR-Swaps are agreements to exchange interest payments, such as a fixed for a floating rate. One benefits and the other does not. Swaps also hide the true exposure that a CB has on its debts as they do not report anything except the derivative, not the underlying risk.

"The bank, the biggest owner of government bonds and provincial loans after state-owned Banco de la Nacion, is being forced to accept losses on the $4.9 billion of debt it holds as part of a default by Argentina. A wave of withdrawals and corporate bankruptcies may follow, analysts said.

The government is demanding domestic banks and pension funds swap their holdings for new securities that pay as little as a third the interest and mature later. Already, Argentina's banks own government debt equal to almost twice their net worth, and many would be insolvent if they valued holdings at market prices, according a J.P. Morgan Chase & Co. report.

``These guys are walking dead,'' said Ernesto Ramos, portfolio manager at Nicholas-Applegate Capital Management in San Diego, with about $200 million in Latin American stocks. ``There's going to be a banking crisis in Argentina.''

Argentines have pulled about $10.1 billion, or 12 percent of total deposits, since late June, including $1.2 billion over the last two weeks.

The government plans to detail terms of an initial swap with domestic investors later today. Fitch Inc. rating agency said the exchange represents a default.

Still, Galicia's provincial and federal government debt equals more than three times its equity, according to J.P. Morgan. Like other banks, it is betting that regulators will help keep the biggest in business, analysts said."

BR-The last paragraph says it all about the mentality of banksters.

The Central Bank of France hopes to save 200MM Euro's in debt costs next year by using "SWAPS" to reduce the average maturity of their bonds.

Again, the problem with CB's using SWAPS is that no one outside of the CB knows how much actual interest is actually owed on the debt.

Of course, since CB's all deal in fiat of one form or another, who knows the real value of anything. The citizens find out like in Argentina�via default and increased taxes as a result of covering the manipulators mistakes.

I hope that some of those poor Argentines got their money out in time enough to invest in physical Gold.

"In the US the M2 money supply has increased by around 10% over the past 12 months, so the US inflation rate is 10%. End of story. As discussed in last week's commentary, defining the inflation rate as a change in prices causes insurmountable problems. This is because money is spent in different ways at different times, depending on investment cycles and external factors such as foreign exchange rates. At certain times commodity prices will be the major beneficiaries of inflation, whereas at other times financial assets will benefit the most. "

Check me on this: In debt-created fractional-reserve fiat money creation theory, deflation can only happen (money supply can only decrease) when debt is extinguished, either by repayment or by default.

Any other loss of asset values that are liquefied by Fed action are net inflationary, right? If Fed buys securities that were in or about to default, that is net neutral, quantity-wise, no?

There is very little debt repayment going on under Fed re-liquefying (as Belgian said: only profits can repay debt). There is only re-financing happening, at lower rates, in order to stave off insolvency.

No debt repayment, and growing defaults, a money loss which the Fed is trying to replace with flakier fiat printing. This means net no-flation if Fed succeeds in balancing them, but IN-flation if Fed overprints or if the newer money is PERCEIVED as less solid than the old debt of same quantity it replaces: then there will be flight to real assets (gold, land, cans of tuna).

That is how I see gold benefiting under either the (temporary) deflation scenario, or the successful (or inadvertent) inflation one: The money which is Fed-created is of less value (flakier fiat) even if of the same quantity as that before. Flight will be toward the more SOLID money, regardless of the statistical quantities reported by economists one way or the other.

At such a time, all "moneys" are not fungible, in other words, exchangeable as if of equal QUALITY. We get into a time where QUALITY of moneys counts, on several different scales, and not just the prior measurements of QUANTITY, which passed for economics when all forms of "the DOllar as money" were seen as equal in Quality.

Adding a new variable here makes our discussions (here and on other similar boards) more interesting, and difficult. People like Oro remind me of chessplayers I've known (and occasionally played) who were always several moves ahead of me in their thinking. I just couldn't keep as many variables as they could awake in my skull, moving and relating together. Who knows -- maybe the other guy was only one step ahead of me; for game purposes it might as well have been ten moves, for I rarely caught a glimpse of his thought processes as he whupped me.

That is why it rarely benefits us to ARGUE with each other about our differing viewpoints here. We are each holding different variables in our heads, and tracking them for our own interest and on behalf of all. It takes many of us to keep all of the pieces of the puzzle ready to put in place when the larger picture is ready for each. I know I can't do it alone, and I would never want to chase off the person who had the piece that showed me how to make sense of mine.

http://csf.colorado.edu/debt/sep11.htmlOne of the points that ORO brought up recently was the push/pull aspect of the trade deficit;i.e. off-shore US dollar debt obligations sucks up the dollars as soon as Mr.G sets them loose.Thereby keeping a constant source of demand,which makes a strong dollar no matter how debased it becomes.

It's quite a chess game isn't it?

Puzzling over the future moves is a never ending source of fascination.

The Federal Open Market Committee decided today to lower its target for the federal funds rate by 50 basis points to 2 percent. In a related action, the Board of Governors approved a 50 basis point reduction in the discount rate to 1-1/2 percent.

Heightened uncertainty and concerns about a deterioration in business conditions both here and abroad are damping economic activity. For the foreseeable future, then, the Committee continues to believe that, against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness.

Although the necessary reallocation of resources to enhance security may restrain advances in productivity for a time, the long-term prospects for productivity growth and the economy remain favorable and should become evident once the unusual forces restraining demand abate.

In taking the discount rate action, the Federal Reserve Board approved the request submitted by the Board of Directors of the Federal Reserve Bank of Richmond.

Because you haven't heard the phrase "strong dollar policy" for awhile.

While the Administration's Treasury Department remains mum on the issue, the latest rate cut (to 2.0%) by the Federal Reserve tells the score loud and clear. And given the dollar's legacy position as a reserve asset currently being held throughout the world, these are the things that sudden financial crisis and hyperinflations are made of.

Guess I'm partial to sinister conspiracies, but here's another take....

The American Empire On Its Deathbed
By Liz Michael
c. 2001
SierraTimes.com
11-6-1

"...and they worshipped the beast, saying, Who is like unto the beast? Who is able to make war with him?" ---- Revelation 13:4

There is a conspiracy theory, which has made the rounds in many circles for many years, that there are forces within the US government that are engineering events such as the 9-11 incident, the Oklahoma City bombing, and so forth, to implement this great "Master Plan" to implement a totalitarian government. This government is part and parcel of a much larger effort by the New World Order, the United Nations, the Illuminati, the Queen of England in league with the Vatican, the multinational corporations, or whomever the scapegoat of the day or the movement, is. Most of the conspiracy theorists present this as if it is a fait accompli which cannot be undone. For all intents and purposes, these people WORSHIP this coming leviathan which they see as unconquerable.

The truth may actually prove a lot more discomfiting for a lot more people when it materializes.

The truth is that the American government is in near collapse. The truth is that the recent attacks on the United States are NOT the result of the Bush family conspiring with the Clintons and other state liberals to coalesce power. The truth is likely that outside powers, far from trying to CREATE a totalitarian USA, are trying to remove the USA from its current position as world military and economic superpower, and would attempt to DESTROY any totalitarian USA, just like the Soviet Union collapsed and Nazi Germany was disassembled.

The powers that be have lost control

All the various moves you are seeing now are not the moves of someone "in control". They are the moves of a group of people that have suddenly discovered they have lost control. And are desperately trying to get it back.

Totalitarians in control wouldn't be intimidated by a little anthrax spread around Washington DC. Totalitarians would stand and fight. The Congress did not stand and fight. They RAN, and they ran like scalded dogs. The rest of the government also ran. These are the actions, not of people in control of a master plan, but of people in panic: people who have suddenly discovered they DON'T control what's going on.

Is the CIA having been hit with anthrax a sign of control? Let me repeat this: the terrorizers of the U.S. government HIT the Central Intelligence Agency. This is the agency that is supposed to know about these things before they happen. This is also the agency that was told by several sources that the 9-11 event was imminent, but either ignored the threat, or could not react to it in time. Do you REALLY THINK they LET themselves be hit?

Gray Davis, in an incredible moment of grandstanding, demonstrated more of this lack of control, by announcing a terrorist threat....but not quite a verified one. Just a rumor. Something even the FBI is now disavowing. So now we have all the king's men scrambling around trying to catch...they have no idea what...trying to stop.....they have no idea who. In other words, they are stumped. They're snookered. They're outsmarted.

A Sacramento journalist was taken into custody by police at Los Angeles International Airport and was forced to destroy photos he had been taking by an over-zealous National Guardsman. Totalitarians are not usually afraid to have their pictures taken. Recently, a key member of the Green Party was denied entry onto an aircraft, because she was a member of the Green Party attending a peace conference. They have tried to blame the anthrax incidents on everyone from Al-Queda, to Iraq, to racist domestic militias, to libertarian militias, to pagans: and its only a matter of time before they try and blame it on leftist activists, unions, and the religious right, or as Clinton did with the Murrah Building bombing, "right wing radical talk show hosts".

These people are not only afraid of foreign terrorists. These people are afraid of you and me. They are afraid of the press. They are afraid of the political activists. They are afraid of the pacifists. They are afraid of their own shadows. They are not in control of anything.

When the going gets tough, the tough go shopping?

Now, this "War On Terror" could have gone a different way. After September 11th, there could have been a call for the militia, which is the whole people, and not a handful of backwoods rednecks as is the romantic ideal (not that there's anything WRONG with being a backwoods redneck), a call for the whole people to be on alert, to become armed, to learn self-defense and battle techniques, and to train to do things like protect the bridges, the nuclear plants, the borders, the planes. That did not happen. We could have been told to prepare shelters against nuclear or biological attack. We could have been told to stock up on supplies, on first aid kits, and train in CPR and medical rescue techniques. To buy guns. To shore up our vehicles for potential emergency use or flight.

Instead, what did Rudy Giuliani ask us to do to save New York? What did George W. Bush ask us to do to save the country.

They asked us to shop.

Rudy asked us to "come see a Broadway show" even though we couldn't drive into the city without a second passenger, and had to go through roadblocks and search points more dense than those at the Mexican border.

The President asked us to fly in planes that he does not fly in, because they are not safe enough for him to do so. Instead of asking us to save, invest, stock up on supplies, he wants us to continue engaging in pointless consumption and satisfying our vanities. Excuse me, Mr. President, but didn't you just say we're at WAR? Didn't you just appoint a new office of Homeland Security because you knew we were going to be under imminent attack by Al-Queda agents in our own country? Yet we're supposed to go on as if 9-11 never happened? We're supposed to go shopping?

Wartime is a time when a little austerity is in order. The only people during war who would spend like there's no tomorrow are people who expect to die soon. If the American economy is dependent on such frivolous spending, then it basically is already screwed.

Anti-terrorism bills the death warrant of America as a world power

The Congress of the United States issued a series of bills in an attempt to regain control, the most threatening of which is the one using the acronym of the PATRIOT Act. The legislation is some of the most liberty-infringing legislation that has been passed in many a decade. President George W. Bush dutifully signed them all without so much as a whimper: in fact, he was glad to do so. At that point, whether he realizes it or not, George W. Bush signed the death warrant of the American Empire.

It is the death warrant of the American Empire for several reasons. First of all, it has coalesced a small but important coalition, on the left, the right and the center, AGAINST the United States government. And that coalition just happens to be the people who are most concerned about liberty and freedom. The President and the Congress has basically just told every person concerned about liberty and freedom in America, from the ACLU activist and the WTO-NAFTA protester, to the religious conservative and the libertarian free marketer, to go to hell. In other words, they essentially told the real American patriots that they can bug off. Liberty and freedom is not important. Security is the prime directive. Sit down, shut up, wave your flag and do as you are told.

They are living the warning of Benjamin Franklin, that those who trade liberty for security deserve neither. The tragedy for them is, that government will be a bigger target than ever now.

The "War On Terror" will be lost

The second reason it is the death warrant to the Empire is that it ensures a loss in the War on Terror. Insures a loss? Yep. Why? How?

It doesn't matter how well American troops do overseas. It doesn't matter if they kill Osama bin Laden. It doesn't matter how many Al-Queda agents they destroy abroad. The real measure of the success or failure of the War on Terror will be to what extent the American mainland will still be standing after all is said and done.

That brings me to the third reason the American Empire is about to die. Immigration policy. Out of the hundreds of new policies implemented in the last few months to ensure the safety of everyone, the most obvious one that would have actually done some good would have been to close the borders and revoke the visas and green cards of everyone having come into this country from a Muslim country. That one act would have prevented more terrorists from coming in, and it would have provided a mechanism for deporting 95% of potential terrorists still in this country.

Instead, we invite Syrians in to take more flying lessons and are going to grant Taliban-sympathetic Pakistanis carte blanche to come here and engage terror.

Because this third reason has barely been addressed, the agents who will continue to physically destroy America in future months and years, as well as kill millions, are already here, and will continue to be here. Eventually they will perform their task. These terrorists will eventually devastate the American mainland. They will do it regardless of how successful we are in prosecuting the war abroad. In fact, it is entirely possible that the more we punish Al-Queda abroad, the more likely the terrorists here will devastate us.

The American people will never forgive the government and the agencies that are going to allow this to happen. They are going to turn on them and destroy whatever is left of them that Al-Queda has not already destroyed by then. Being Democrat or Republican is not going to matter because both of them let it happen, and both of them will rightly share the guilt.

FBI shows more evidence of having lost control

Now, occasionally, the king's men have caught some of these people. For example, the Millennium Bomb plot was foiled. But they cannot catch them all. Not in time. It took them seventeen years to catch the last big mail terrorist, the Unabomber, and he was one guy living in a shack. They got lucky when a no license plate vehicle turned up Timothy McVeigh: but they still haven't caught most of McVeigh's coconspirators. They have one thousand foreigners in jail over the 9-11 incident: the only ones who have been charged have been charged with extremely Mickey Mouse stuff like "lying about having met" one of the terrorists, or lying on an application for something or another. This indicates to me that law enforcement doesn't have anything approaching a clue on this. The arrest of a thousand people on nothing is another sign of desperation, and a sure sign of having lost control: and it is a sign of tyranny that many of us refuse to tolerate in what is supposed to be a free country.

Governments are not perpetual and eternal. I know to many who work for government or depend upon government that they seem so. Many governments and many leaders talk as if they are everlasting. Hitler talked about a "thousand year Reich" which ultimately lasted only 12. The government of one of the mightiest powers of the 20th century, the Soviet Union, failed to survive to see the 21st.

Whether the United States survives as an entity, whether we see it resurrected under the original intent of the founders, whether we see a fragmentation into several states and regions, whether we see a reassertion of former nations such as the Confederate States of America or the Indian nations, I do not know. But of one thing I am sure: the Imperial World Superpower of the United States is finished. It could survive perhaps slightly beyond the Bush Presidency, but probably not long after that.

I just pray that most of the American people are not killed along with their government.

What can we do?

Many of you are violently disagreeing with what I just wrote. Many others are asking, "well, what then?" If you are not asking it now, you surely will in the future as more terrorist incidents devastate America.

You have to come to the understand that in its essence, America is not its government. America is not its flag. America is a concept, a concept that enshrines liberty and freedom. America is also a people. There are many things which you can do to preserve the America that deserves preservation.

1. Make very huge mental adjustments

It doesn't matter what your politics are. It doesn't matter what your religion is. Whatever they are you need to take them seriously. The primary enemy.... we have secondary enemies, for certain, and I will offer suspects, but the primary enemy is Al-Queda. Most of America is centered on the concept of money. It may shock you to hear this free market capitalist tell you to not obsess over money.

Your enemy carries with him a religious fervor which will cause him to do many things to ruin you. And while I do not believe Allah trumps Yaheveh, and do not know if he trumps any other gods or not, you had better believe that Allah trumps Mammon. In this environment, if your god is Mammon, you are going to lose You may very well sell your enemy the rope with which he hangs you. He did it on 9-11.

Most people base their politics on the assumption that the government will always be here. I submit to you that if you really care about your issue concerns, you prepare for the day when the government cannot or will not enforce them. Develop ways of caring for the environment which DON'T involve enforcement by a government thug. Develop a safety net which DOESN'T depend on the government. Develop crime fighting methods that DON'T depend on the king's men being there to do it for you. Develop disaster and rescue efforts that assume the government cannot act, and that you will have to do it yourself. When al hell breaks loose, not only will FEMA NOT be a tyrannical agency set to take away all your rights, as is the popular myth circulating in patriot circles - FEMA will likely not be there AT ALL.

The government will soon NOT be there to help. They likely won't be there at all. And you had better be ready for that.

2. Civil Defense

Become the militia, and organize neighborhood defense forces. Buy guns. Stock up on food, water, first aid, and survival supplies, and construct viable shelters. Develop plans for defending vital services such as hospitals, power plants, water resources, and food. Develop evacuation plans and have them ready to go at a moments notice. Determine what your "bug out" territories are. Learn to fight. Get in shape. Stay healthy and learn about self medicine, for when the doctors won't be available.

This is the fatal mistake that both George W. Bush and his Democratic loyal opposition made: they failed to call up and muster civilian defense. There are cities which are going to be vaporized because of that fatal mistake. There are environmental resources that are going to be devastated because of that fatal mistake. You and your community, however, don't have to follow them all over a cliff.

Don't like guns? Believe in gun control? Get over it. We're at war and you're a target. In war, soldiers have guns, and you are one, like it or not. Learn how to defend yourself and your family from wild animals and thugs or watch them become worm food. You're a pacifist? Al-Queda isn't honoring the wishes of conscientious objectors today, sorry.

3. Resist the tyranny

Many of you will get this one right away. Resist the tyranny. Live as a free person. You don't have to be told. You easily see that the only way to make the tyranny ultimately go away is to refuse to participate in it.

Others of you will ask, but wouldn't this be "unpatriotic"?

Have you ever heard of the principle of "tough love". Basically, sometimes you have to let your children, or your friend, go, and let them suffer the consequences of their actions, in order to save them. Because enabling them to continue taking the wrong path will only in the long run get them, and maybe you, killed. Study any twelve step program for validation of this.

This is what has to be done with the federal government, and many of the state and local governments. They are our children. We created them. But they are errant children. They are children who have become thugs and terrorists. They're not REALLY the enemy. But in order to rescue them, we may have to treat them like the enemy. We may even have to kill them, as per the Toraic proscription as to excessively errant children. We may have to shun them, as per the New Testament proscription as to excessively errant and unrepentant church members.

Resisting the tyranny means many things. It means not paying taxes. It means trimming your reliance on the state, and upon its identity documents, as much as you can practically get away with. It means using jury nullification to disrupt their trials. It means using every trick you can think of to disrupt their affairs.

Don't talk to the FBI. If you talk to the FBI, it gives them the chance of prosecuting you because they think you lied to them. So just don't talk to them. There are a thousand people in federal detention centers as we speak, NONE of them having been charged with any crime of any consequence. It can happen to you, too. Don't talk to them. Tell them to go to hell.

Do you think that is treasonous talk? Well, the greatest President we ever had, one Thomas Jefferson, said that when the government fears the people, there is liberty. But when the people fear the government, there is tyranny. So immediately, I say to you now. Stop fearing the government. Make them fear you. Make them mortified to come into your neighborhood, terrified to approach your door and knock on it, frightened to stop your car and ask for your license.

Remember that these civil liberties violations started with the government. The plans they have to invade our privacy, take our property, deprive us of liberty and freedom of travel, were initiated BY the government, not by freedom lovers. THEY started it. If we love freedom and liberty, we must fight for it. We must fight ALL tyranny, whether it comes from Osama bin Laden or Saddam Hussein, or whether it comes from agents of our own government.

Many of you have varied opinions on George W. Bush, ranging from the "Antichrist" to the best President we could have at a time like this. I don't think President Bush is a BAD man. But I do think he has made a fatal mistake. A mistake which he could undo tomorrow by executive order: but I don't see it happening. Having done this, he has failed to do his constitutional duty, and does not deserve support for his current domestic policy. And don't you dare gloat, Tom Daschle. Mr. Bush hasn't done anything wrong that you haven't also done, and nearly every member of Congress, Democrat and Republican, with you.

And definitely, don't say "I told you so", Mr. Gore. Most of our present dilemma happened because of events set in motion on your watch and due to your incompetence and your tolerance of a corrupt administration.

4. Stand for public office

Every single freedom loving patriot needs to stand for public office now. They need to stand in every party: Democrat and Republican, Libertarian and Green, Reform and Constitutionalist. There are really just two parties now: Patriots and Traitors. Washington DC, and most state governments, are "one party" operations and it is the wrong party. There are no more chances to save the United States of America by the electoral process. This is the last chance. If you all don't stand now, there will be no more chances. If you fail to choose to work with ballots now, you guarantee you will have to work with bullets later. You may have to anyway: but do you really want to see an American Civil War?

5. Homeschool your kids

I don't say this lightly. The public school systems in most communities are largely beyond hope. They are not teaching values. They are teaching sheepery, to go along to get along. They are literally terrorizing kids and parents alike with "zero tolerance" tyranny over guns, drugs, t-shirts, and free thought. Screw them. Whatever your values are, now is the time to teach them to your children. I can assure you they will not learn them in public school. They will also not learn "how" to think in public school, as opposed to what to think.

Also, public schools are going to become a very dangerous place. Osama bin Laden has already told us that he will attack our children. What better way to attack our children than at school, all of which have been declared "arms-free zone" enforced by such zero tolerance tyranny that you cannot even point a finger in a mock game of cops and robber without suffering persecution. Such schools have in effect sent an engraved invitation to Al-Queda terrorists which says: HIT ME, OUR KIDS AREN'T PROTECTED BY ANYONE. The law of the jungle will assert itself here. They will attack our schools. They will kill our children, just as sure as any wilderness predator goes after the young, the weak, and the least defended.

You think they won't? Then you must have forgotten that the Ryder truck of Timothy McVeigh was parked right below a day care center, which McVeigh knew existed.

6. Reorient your economy

The reason this country is in as much economic jeopardy as we are in is that we have forsaken industrial jobs and sent them overseas, and we have replaced them with Pizza Hut Delivery and a lot of service sector jobs.

I want to suggest that now is the time for everyone to tighten their belts. Now is the time to make economic purchasing decisions based on needs and not on wants. And we should all orient our economies and our jobs and businesses to things which people are going to need regardless of the economy. What would those be? Food. Shelter. Basic clothing. Medical supplies. Basic transportation. Information. Communications. Energy. Defense. Waste disposal. Less emphasis should be put on "toys" and more emphasis on utility: in other words, if you're going to dabble in toys, make them toys relevant for survival. Also more emphasis needs to be placed on things which can be recycled and refurbished, and less on "throw away" stuff.

Moreover, we need to strengthen our mutual survivability by getting as many of those things locally as we possibly can.

Also, if you are investors, you need to reorient your investments so that they do two things. Number one, so they are not dependent on the US dollar, and two, so they are reflective of material and necessity industries and not pleasure and service industries, because the material and necessity industries are more likely to survive both a catastrophic series of events and the collapse of the dollar.

Additionally, get mobile. Mobility may be the key to survival. If you're into cars, I would suggest classic cars as a hobby. Why? In the event of a nuclear-generated electro-magnetic pulse (EMP) wiping out electrical devices in an area, classic cars which use an older technology may be at a premium, and you may be able to escape in that old clunker when the new stuff doesn't work any more.

Final thoughts

The odds are very great that we are fighting a lot more people than Al-Queda. Very likely, Saddam Hussein is a root cause of this and future violence. For those of you who believe in Biblical prophecies, Hussein considers himself a modern day "Nebuchadnezzar, King of Babylon". You ought to make yourself familiar with what is prophesied to be destroyed by Nebuchadnezzar, the Babylonians, the Assyrians, or the Chaldeans, all which could correspond to modern day Iraq.

Moreover, I also pose a question: who benefits from our destruction? Who gains from our removal as an economic and military superpower. Certainly usual suspects like China and Russia might. Islamic fundamentalism could well spread, with nuclear weapons falling into the hands of people willing to declare Jihad against all non-Muslims, surely a dan : �^�ܼ�"@ ���p `"�� @ ���^� L�>6�h�b�a�--��>6uT�| @ � A �a�jt�_� d��� @ �_0 >6�p �_0

http://www.usagold.com/gildedopinion/Jensen/index.htmlWhen President Bush stopped calling China a "strategic competitor" and made it a "partner," he had more than terrorism on his mind. Sino-American trade now totals $120 billion a year, making the two countries interdependent. With the world sliding into recession and China likely to be least affected, it offers a cushion for U.S. business and a prospect of earlier recovery... The figures coming out of Washington and New York last week were certainly grim. ... In contrast, China's projected growth rate of more than 7 percent this year is expected to lose only half a percentage point.

Most sources indicate all the gold ever mined would fill a cube 20 yards (60 feet) on a side, or 216,000 cubic feet. A cube 100 feet on a side is 1,000,000 cubic feet, or about 5 times more voluminous. But who really knows?

Also, it is reported that the platinum ever mined would fit in a cube of about 9,000 cubic feet, and most of it is gone.

And all the silver ever mined would have filled a cube of about 3.5 million cubic feet. The next time you're at a football game, imagine a cube filling about half the playing field, from the 0 to the 50 yard line. That approximates all the silver that's ever been pulled from the ground, yet the majority of that is gone, too.

In the first signs that they do not expect to survive the war, Osama bin laden's elite bodyguards have begun marrying off their daughters and sisters to Afghan men around Kandahar.

The secret weddings took place last week in suburbs and villages around Kandahar and involved Arab women getting married to locals who agreed to look after them in return for large sums of money, The Sunday Telegraph reported today.

"The Arabs came at night bringing large numbers of women and suitcases of money," the newspaper quoted Abdul Razza, a teacher from Kandahar who witnessed some of the negotiations.

"They asked that the people look after their womenfolk and protect them in the war."

"The fact that the Arabs feel they can no longer protect the women is the first sign that they believe the war is not going their way," the report quoted a western diplomat as saying.

The women were completely covered but Razza believes some were as young as 12 and that they brought their mothers with them. Local mullahs carried out the quick marriage ceremonies.

An estimated 2,000 Arabs from Sudan, Egypt, Algeria and the United Arab Emirates, among other countries, lived in Kandahar before the war but fled last month before the start of the American campaign.

Some managed to escape, but many are thought to be in Uruzgan, a mountainous province with a network of caves that is the home province of Mullah Omar, Taliban's spiritual leader.

According to Razza, however, there was no shortage of men agreeing to take the Arab women as wives. "Normally we have to pay for women so they were happy to get brides who came with their own money particularly at the moment with so many shortages and high prices for food and fuel. They also believe it is their Islamic duty to protect these guests."

Many of the Arabs marrying off their women are believed to be from bin Laden's elite 055 Brigade, a crack squad of 500 Arabs set up five years ago.

Over the past two weeks, Americans have stepped up the bombing of caves where bin Laden and his guards are thought to be hiding.

http://www.kitcomm.com/comments/gold/2001q4/2001_11/1011106.135846.ted_butle.htmSilver bugs - A link for the follow up letter from Mr Buttler to Mr Viola and Mr Collins(Comex) with regards to the manipulation issues raised per previous postings here.
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Galearis(64804)- . . . It would be interesting to see some of those Ag displays in the Museums yes. You have had a good privileged background with the experience you have had in this precious metal. . . in the days ahead it will again become really precious to ALL.
- Netking

Actually, money doesn't disappear on default. If I eventually renege on my credit card, I still have my pocket fisherman and Ronco still has it's payment, and those $s still circulate in the system (unless velocity drops to zero, which is a whole other topic). It's only when some "financial institution" somewhere...credit card company, bank, credit insurer, bond fund, money market fund, (or even a private investor) takes the total loss of my non-payment against its original capital base that the money is extinguished. If the lending process had been carried to extremes, far in excess of fundamental economic reality, these write-offs, in the aggregate, can easily exceed the capital base of the entire banking industry, or worse, the entire financial sector...game over. Hence, the likely explanation for Japan's reluctance to clear it's books. It can't. What they're calling deflation in Japan is a combination of falling money velocity and repricing (i.e., correctly pricing) grossly inflated financial and real assets.

Some people call the repricing of inflated assets deflation, but it's really just bringing fantasy back in line with reality. Other people call falling commodity prices deflation, but it's really just marginal changes in industrial demand as the economy moves from unsustainable fantasy phase back to sustainable reality. Now, if the world were operating in a non-bubble-economy mode and prices began falling because productivity and technological gains were increasing output with the same or reduced inputs (including, and especially including capital), THAT would be deflation, provided the money supply was constant or growing, at best, no faster than output. And, incidentally, the world would probably be on either a gold standard or some extremely disciplined (in other words, imaginary) fiat regime.

It's funny; we've had rampant US and global inflation the past 10, 20, and 30 years. The latest period required something like 4 or 5 units of capital for each single unit of output in the US, yet this was labeled "normal", all the while asset prices were plainly showing the effects of this inflation. Now that these prices ever so slowly begin to correct, we hear shouts from the rooftops "Deflation! Deflation! Save us! Create more money! Extend more credit! Faster!".

There's no easy cure for the junkie in need of his high. What's the monetary equivalent of methadone? Devaluation and overt inflation? It reminds of a line from a Woody Allen movie (I think it was either "Play It Again, Sam" or "Annie Hall"). Woody's having all these school children give there life story speech, but from the perspective of the adult they would someday become, and a little girl stands up from her school desk and says, in a total deadpan: "I used to be a heroin addict, now I'm a methadone addict".

US/Sino TradeWhat is the breakdown? My bet is a larger volume of Sino coming this way. Interdependent? I have worked in US mfg. for twenty years and I can say with great conviction that it is difficult to find US producers (excluding foods and medicines) of most products. IMHO, the US consumer is DEPENDENT on this Forex disadvantaged nation of poor people working for scant wages producing quality consumer durables and non-durables.

Not that long ago, some U.S. economy watchers warned that the Federal Reserve was lowering interest rates so quickly there was a danger inflation might start to rear its ugly head again. And now? Now, a little inflation would be a sight for sore eyes, since that would mean that at least the economy was growing again. Now, interest rates are approaching their lowest level in 40 years and still no one is worried about inflation - instead, they're worried that even lower rates aren't going to do any good.

Earlier this year, one of the big economic debates was what letter of the alphabet the U.S. downturn would wind up resembling: a V-shaped recovery with a sharp bounce-back from the bottom, or a W-shaped rebound with two bottoms. Only a few pessimists were favouring a different letter - the dreaded L-shape, where the economy falls to a new low and stays there for years. Now, the proponents of the L theory are increasing in number, as each new economic report looks worse than the next, with no end in sight.

Black Blade: This article does not paint a very cheery picture. Alan Greenspan has only 200 bps left! His pile of chips is dwindling and now he is walking on thin ice. It looks as if we could be entering the end game soon. Consumer and corporate debt hangs around the necks of all like a very heavy albatross. Even with "cheap" cash, there does not appear to be a rush to the banks. This recession is going to get worse no matter how much more Alan and the boys cut rates. Meanwhile companies desperately look for ways to cut costs by casting nonessential "Bones" on the "Bone Pile." Regardless, corporate earnings are in the toilet as companies loudly and deceptively tout strong "Pro Forma" earnings in an effort to pull the wool over the eyes of the dim bulbs. In a word - "GRIM"

Being a chess player myself, I loved your analogy about chess. The interesting thing about chess is the Masters anticipate far in advance what their different scenarios are while waiting for the counter move.

When playing on the clock in tournament chess you don't have the luxury that you do in a leisurely game.

Once I was in New Orleans strolling down one of the side streets in the French Quarter with my lovely bride, when I came across an individual reading a chess book with a chess board, a table, and another chair across from his. At one time in my life I had won my 3,600 member class high school chess championship and having a few drinks, was felling "cocky" about my skills. He was a chess Master that charged $5.00 per game. Beyond stupidity, I asked him if he would like to wager a side bet on the game. He then asked me my name, I told him, and he said to save my money. He said there were only four people in the world that could beat him at Chess, and I wasn't one of them. Four games later at $5.00 per clip, I decided that he was correct.

The difference in Chess and Gold manipulation is that you can see and anticipate your opponents moves on a fair level playing field.

Starting on page 42 of the Oct. issue of "Futures" is an article on refining the pattern recognition analysis of the silver market. I'm only slightly interested in technical analysis but there was a nice chart of the yearly percentage change in mine production of silver. It shows a decline of over 40% over the last two years with the rate of decline accelerating! What it does not give is any references to back up this claim or any indication of whether this is primary silver production or secondary (bi-product) production or both. The article is "Silver in the Data mine" by James Cormier-Chisholm. More on this later.
Rich

TOKYO (Dow Jones)--Japan's reserves of convertible foreign currencies, gold and International Monetary Fund special drawing rights rose $8.7 billion in October from September to $405.7 billion, the Ministry of Finance said Wednesday.

The rise followed September's increase of Y24.79 billion from August.

The ministry said its foreign exchange interventions totaled Y3.211 trillion during the July-September period, when Japan acted aggressively to weaken the yen after the dollar plunged in the wake of the Sept. 11 terrorist attacks in the U.S.

The article I mentioned in 64828 is quite technical but for one section whose reading ought to delight silverbugs everywhere,

"SILVER LINING Today's silver market should be of fundamental interest to investors and traders. The decline in silver mine production, seen in "Wonder where the silver went?" clearly ranks as an important variable in the silver market.
Mine output has declined significantly since 1992, and the polynomial fit is quite tight. We can project from this trend forward on an annual basis and conclude that silver mine production virtually will disappear in 2002-2003.
This massive undersupply of silver highlights the metal as an undervalued commodity. If silver reacts as many other physical commodities- natural gas in 2000 comes to mind- the price response could be strong and swift. Historically, silver markets go through the most volatile upswings during the first six months at the beginning of a cycle of rising prices."

The bio at the end gives James Cormier-Chisholm as the pres and CEO of a consulting firm specializing in financial and energy resourse data mining. I won't give his address as doing so may be infringing on proper forum decorum (construed as advertisement?) but I'll e-mail him as to some more information on his chart showing 40% silver production decline over the last two years. Maybe he'll answer. Sould I also ask him if he happens to know exactly how much silver is left in world storage??
What the hey, I'll ask him for the date when the first industrial order for silver is only partially filled with the rest backordered due to "we ain't got no more of that stuff" in the storehouse.
Rich

LONDON, NOVEMBER 4: PAKISTAN is under pressure to move all or part of its nuclear weapons to China for safekeeping from fundamentalists and it is apprehensive of pre-emptive strikes on its nuclear sites by America, India or Israel to prevent the weapons falling into fundamentalist hands, media report said today quoting Pakistani sources.

The threat to weapons widely regarded as the Pakistan military's ��crown jewels�� has forced Islamabad ��to consider removing warheads to China, Pakistan's closest strategic ally in the region,�� the Sunday Times reported.

The prospect that loose warheads might be loaded onto helicopters or moved around a region foaming with fundamentalist turmoil is adding to fears in Washington that the war in Afghanistan might provoke a nuclear crisis.

According to the report, Abdul Sattar, the Pakistani Foreign Minister, insisted last week the arsenal was secure. But Washington officials have expressed mounting alarm that any coup attempt against General Pervez Musharraf, the military President, might put Pakistan's nuclear arsenal at risk.

Pakistani generals were appalled by one authoritative American report last week that an elite Pentagon undercover unit, trained to disarm nuclear weapons, was exploring plans for a mission inside Pakistan. (PTI)
************************************
Lord knows there's Taliban in Pakistan after that Christian Church had 16 executed last week.

So Bush sees the possibility of Pakistan being overthrown as a move to completely destabilize the region, and to potentially gain legitimate nuclear weaponry (in the hands of suicidal maniacs-YIKES!). Now that would really suck. I don't think we'd be able to avoid a nuclear explosion (or two) if that ocurred.

The question then becomes...are there enough virgins to go around?

Are the virgins that terrorists get at the end of a cataclysmic war, with hundreds of thousands of martyrs, as nice as those at the beginning of the war? For that matter, is there 'sloppy seconds' to worry about? I knew some girls who claimed virgin status here on earth, that in reality, could only have been talking about olive oil. Not that it bothered me, but then, I wasn't blowing myself apart for them.
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R Powell- Yo Rich! I happen to know that asphalt is still cheaper than gold.......not by much, but still cheaper. Cobblestones/Belgian Block is another matter. As for streets paved with gold, that's my kind of virgin....9999.9 fine.

Great chart in your earlier post and good comments, all the pieces confirm we are in a critical period time wise for the POS, long term W.D.Gann timing also suggests November 2001 as a bottom.

The "we ain't got no more of that stuff" words will come for sure . . . soon. TPTB "could have" had a controlled rise eg to $7.50 and then $9.00 etc etc some time back to flush out a little physical Ag and allow some time(but not much!) for the various mines to come back on stream including the 'Super Mines' . . . but NO they printed paper by the truck load . . . therefore the scene is set . . . there will be a theremonuclear meltdown in the POS.
- Netking

"* Enough of the cursed cynicism that the
courts are as rigged as the markets, that
there is no fighting the power. We know
some things about market rigging but there
is no evidence that anything in court
today was rigged. We got a day in court if
not quite yet OUR day in court. And for
all its faults this remains a country
where one brave man pleading his own case
can summon the representatives of all the
money in the world and put the bastards
in danger of having to answer for themselves."

"* The lawsuit is an important front in our
struggle for free markets and honest dealing
but it is not the only front, and, win or
lose here, our strategy and plan will be,
in Churchill's words, KBO: Keep buggering
on. Thanks to GATA Chairman Bill Murphy and
Howe and those who have come to their
assistance, we have discovered that the
scheme against gold is only part of a
bigger scheme involving interest rates
and currencies to deprive the financial
markets of any standards of value and to
expropriate the world for the benefit of
certain Wall Street interests and to make
the world the slave of the U.S. dollar.
This deeply shames Americans who
understand it. That is why they will
continue to oppose it as best they can
regardless of what happens in court. It is
an anti-imperialist cause and thus a great
cause. And, as Churchill said, "When great
causes are on the move in the world, we
find that we are spirits, not animals, and
that something is going on in space and
time, and beyond space and time, which,
whether we like it or not, spells duty.""

Comment: Cynicism? Vigilance? Which is it? Which do the courts deserve? You get an independent, honest, and un-owned judge? Congrats, what were your chances at this level? My take on the issue is that the GATA 'Patriots', and I mean that most wholeheartedly, see a much clearer picture of the 'magnitude of the monster' or the 'magnitude of the mess' than they did 1 year ago. The next 6 or 12 months will ratchet up the game to another concentric ring of infestation, imho. Do we not find the system to be contaminated more than previously hoped, on a semi-regular basis? We peel the onion and it makes us all cry for our Republic! I hope that makes me a vigilant patriot, yet still somewhat cynical of the 'system'. GATA does not deserve the cynicism, but the elitists certainly do. GATA merits our FULL support because {I sincerely believe} they are tremendously advancing the inevitable to each of our benefit.
I figure they will at least allow leeway for my expressions because of ongoing support for their efforts. Do some of you, others, in the cheap seats, have that luxury? Sorry, just a plug for GATA contributions.
Churchhill also said "nevah, nevah, nevah, nevah, nevah, give up..........................."

www.majorproblem.comIt pains me to re-post these snippets from Richard Maybury's Early Warning Report {it will pain me more if he gets me for copyright infringement}.

"Washington and the Kremlin say they have formed ties with the Northern Alliance in Afghan."
"Most importantly, the Northern Alliance is worse than the Taliban. It is the world's top drug cartel, it makes the Colombians look like choir boys."
"The Northern Alliance uses rape, torture, and mass murder. Like the long list of other thugs with whom Washington has had alliances- Saddam Hussein, Fidel castro and Osama bin Laden, among others- once the Northern Alliance gets what it wants, it will turn on us."
"Under the Northern Alliance, Afghanistan produced 70% of the world's heroin, which is derived from opium. The Taliban cut that by 95%. now the opium fields are being replanted."
"The maps you and I look at are drawn in the West by westerners, they are deceiving. There are no real countries in Asia or Africa, except in the sense that each tribe is a seperate country with a seperate agenda. The agenda has nothing to do with liberty, free markets or love of America. Mostly the agenda is about killing as many neighbors as possible."
"This is the real political situation US forces confront as they try to work within the coalition the mainstream media seems to admire so much." END

Comment: Mostly out of breath. Maybury has seen a major conflict coming, along the lines we are headed, for the last 20 years. GREAT reading! Will I be in trouble at "Home" for putting this up? Oh well.

"Churchill said, "When great
causes are on the move in the world, we
find that we are spirits, not animals, and
that something is going on in space and
time, and beyond space and time, which,
whether we like it or not, spells duty.""

Thanks auspec, Chris, Bill: another of my favorites...

Kind of what Lincoln said about Grant when the Washington buzz complained about his drinking: Find out what brand he's drinking and send a case of it to each of my other generals.

Bill Murphy is someone who has responded to duty's call, and I would say that we here, too, respond daily to the call of duty to further ways that the labors of all may be fairly valued and rewarded, and the savings of a lifetime's labor be protected.

SWAP PUTS-"A foreign central bank might receive the right to put a certain amount of its dollar holdings to the United States for gold at a specified price, in exchange for which the United States would receive the right to put an equal amount of its gold to the foreign central bank at the same price. In effect, the foreign central bank would obtain a call or option to buy gold, and the United States an option to sell gold, both at the same fixed price. However, taken in the context of the entire discussion, the swap puts on gold appear to be something different.

Although I am not aware of any instance in which the words "swap put" have been used together as a noun, many exotic derivatives have been created in the over-the-counter market. Accordingly, the term may designate a special instrument designed for the Treasury, the Fed, or the ESF. While the term might in a colloquial sense be used to describe the unwound side of an existing swap, this usage would make a lot more sense if the swap possessed some sort of roll-over provision or, better yet, option not to unwind. In the latter event, exercise of the option would "put" or "stick" the swap to the other party by converting it into a completed sale.

For example, the United States might enter into a swap of gold against U.S. debt securities with a U.S. bullion bank at, say, $350/oz. Rather than take the physical gold out of U.S. reserves, the bank might use it either to hedge gold borrowings from other sources or in a location swap with another large holder. But if the bank had an option under defined conditions to convert the swap into an outright sale of U.S. gold rather than a mere time-limited exchange, one might think of the arrangement a "swap put" or a swap with a put option attached. Like the previous example, this transaction would facilitate gold lending by central banks to bullion banks as well as encourage and support the use of derivatives by bullion banks to suppress gold prices.

However ambiguous their precise nature, certain attributes of Mr. Angell's "swap puts" appear quite clear: (1) they attached to "our gold," meaning the official U.S. gold reserves; (2) they were in 1991 part of an existing and growing program as encompassed in his expression "now becoming the case;" and (3) they must either have been of long maturity or possessed roll-over provisions because otherwise they would not "just sit there." Since his departure from its board of governors, Mr. Angell has stated more than once during appearances on financial TV programs that the Fed has "precise control" over the price of gold. His 1991 comments to the FOMC open a window on just how this control is achieved."

BR-So as part of the trial, provided they can get past the government's and banksters dream team (as opposed to Mr. Howe sitting at his table by himself), maybe this term "swap puts" will finally be defined.

Again, I stress the problem with all derivatives is that they mask the underlying risk associated with them. Central Banks should disclose all of their financial manipulations and their underlying values as part of their disclosure requirements.

The Freedom of Information Act is not valid as far as the Fed is concerned. I wonder why. Never mind, we all know why.

http://quote.yahoo.com/m2?uAsian markets are getting ripped tonight. The Nikkei is down -348 and the Hang Seng is down -138. These guys usually play "follow the leader," however, yesterday's run-up in Wall Street does not seem to impress them. Also Japanese banks are sharply down on news of more bad loans. Apparently the news is worse than previously thought. Rumors persist that a couple of Japanese majors are in danger of bankruptcy unless the BOJ and Government step in to save the day.

TOKYO, Nov 7 (Reuters) - The Bank of Japan is facing calls to adopt a more aggressive
monetary policy to revive the world's second biggest economy as a slowdown in the United States pulls Japan closer to its fourth recession in a decade.

WHAT IS ACTUALLY HAPPENING?

- Because of their bad-loan problems, banks have been reluctant to expand lending despite abundant, cheap liquidity.

- The banks have shunned riskier borrowers, and healthy borrowers are opting to pay back their loans since those liabilities become more expensive in a deflationary environment.

Black Blade: Maybe the US isn't too far behind.

tg - maybe it is like two frantic people drowning in the ocean each grasping the other to stay higher out of the water, yet both are doomed. "Interesting Times"

LONDON (AP) - Alarmed by a relentless slide in oil prices, OPEC members are likely to agree to cut production by as much as 1.4 million barrels a day when the cartel's delegates meet next week, an OPEC official said Monday. Such a cut would be up to 400,000 barrels a day larger than the potential reduction called for in recent weeks by members of the Organization of Petroleum Exporting Countries. OPEC members are considering cutting output by 1.2 million to 1.4 million barrels a day, or 5 percent to 6 percent of their official production, said the OPEC official, speaking on condition of anonymity from the group's headquarters in Vienna, Austria.

Black Blade: Non-OPEC producers are at near capacity, however, Mexico, Norway, and Russia announced that they won't cutback. It doesn't matter as they have no room to expand anyway. OPEC may have to cut production as much as 2.5 million bbl/day to have much effect. Even then some will likely cheat on their quotas at that low level of production. Could get "Interesting" as the war could easily expand into the petroleum producing region as Islamists tend to view the war as a crusade of Christians against Moslems. "Interesting Times"

After an accumulation of bad economic data, the Federal Reserve did the only thing it knows to do � cut interest rates.

This time by 50 basis points to 2 per cent for the federal funds rate, or the interbank overnight rate, and that was matched by a reduction in the discount rate, the Fed's lending window, to 1.5 per cent. But after ten rate cuts, the highest number in a single year, and with a fast growing money supply, confidence in the Fed's ability to revive the economy is waning.

That's good news for gold bugs. Real interest rates are now negative since the consumer price index is running at an annualized 2.6 per cent. That is invariably good for gold but the yellow metal has had a hard time pressing its case as a safe have since September 11. Nevertheless, things are different if you have patience and there is every reason to expect an improvement in the gold price.

The Monetarist theory that underpins the manipulation of interest rates cannot explain why the aggressive easing has not already had the desired effect. Policy makers will no doubt be casting their eyes toward Japan where no amount of monetary and fiscal easing has pulled that economy out of its decade old recession. Negative real interest rates are a nasty inflection point for central bankers.

There is growing concern that the Fed is manufacturing yet another boom-bust cycle. But this time it is almost guaranteed to come with untamed inflation. Similarly, fiscal stimulus measures are likely to kick in too late and could create unnecessary volatility in monetary policy while stoking additional inflation.

All excellent signals for gold. But the dollar will have to fall first and there are technical reasons to think that is going to happen, along with a strong upsurge in gold equities. Gold has no safe-have status? Hmmm. Let's see.
------------------------------------------------------------
Your homework; study the graphs in the link . . . for those who has ears to hear, let them hear.
- Netking

POG 280,15$
And holding, despite the IR's zero-level, dive. This is of some significance. A "signal" ? Have interest rates bottomed ? Is Gold disconnecting from the virtual deflalala ? Will the ECB only lower by 0,25% on thursday and put more pressure on the dollar ? And how sure can Duisenberg be of an inflation below the 2% for 2002, without knowing what OPEC's plans are ? Is Pakistan, the next one, to fall under Uncle's rule (pipeline) ?
Is the China/US -trade of 120 billion $, out of a GDP of 10 trillion $, going to compensate for the trade deficit ?
And why should a euro-rate-cut, be of any significance, to stop the global contraction ?

What happens with the interest rate derivatives, if the bottom has been reached and volatility drops to near zero ?
Is it the start of the dollar >>> euro (Gold)carry trade ?
Devalue the dollar and pay all dollar-debt back with worthless paper ? Just, put some upwards momentum on POG and all the water flows where you want it ?

Panda, are you having a meeting with the Rothies ?
Interesting times...isn't it BB ?

THE European Central Bank (ECB) has come under mounting pressure to follow the lead of the US authorities and cut interest rates again after the International Monetary Fund (IMF) called for new reductions in eurozone borrowing costs.

The call by the IMF came as the US Federal Reserve announced that it was cutting its key interest rate by another half-point to 2 per cent, hardening speculation that the ECB would give in to demands for lower rates at its policy meeting tomorrow. In its annual assessment of the eurozone, the IMF said that it "saw fresh room for further monetary easing, particularly if the euro appreciates". This view was widely-shared by market analysts, who have become increasingly concerned about faltering European growth.
�

Asian leaders back free trade area with China
By John Burton in Singapore
Published: November 6 2001 20:19 | Last Updated: November 6 2001 20:22

South-east Asian leaders on Tuesday endorsed a proposal to create a free-trade area (FTA) with China over the next 10 years in what would be the first step towards a larger east Asia trading zone.

The decision taken at the annual summit of the Association of South-East Asian Nations in Brunei is aimed at reducing the region's trade dependence on the US.

Beijing advanced the proposal at last year's Asean summit in Singapore, in part with a view to easing nervousness in south-east Asia about the growing competitiveness of China as a manufacturer and recipient of foreign direct investment.

The endorsement of the FTA proposal comes when south-east Asia is suffering an economic slowdown due to falling exports to the US, which has prompted calls for closer economic co-operation within Asia.

"For us to depend on the US alone as a market for growth for east Asia will be much more difficult in the future, because the US economy is going to slow down," said Goh Chok Tong, Singapore's prime minister.

Asean believes an FTA agreement with Beijing would further open a potentially large market, with China growing rapidly and about to enter the World Trade Organisation.

But some Asean nations still have concerns that their resource-based economies would be overwhelmed by manufactured products from China.

"An FTA with China could prove to be unworkable since there is already resistance to free trade within Asean, with some countries wanting to protect local manufacturing industries such as Malaysia with its car industry," said Kostas Panagiotou, regional economist with Kim Eng Securities in Singapore.

Asean is still having difficulty agreeing the scope of an internal free trade agreement, due to come into full effect next year.

Officials will now study the form and scope of the FTA, which would create a trading bloc of nearly 2bn people and a combined gross domestic product of $2,000bn.

China has identified five important areas for co-operation under FTA, including agriculture, information technology, human resources, direct investments and development of the Mekong river basin.

South Korea, fearing it could be frozen out of the region, has proposed a wider east Asia FTA that would extend to all of north-east Asia, including Japan. A final report on that proposal is scheduled to be discussed at next year's summit in Cambodia.

However, Japan has indicated it is not enthusiastic about an east Asia FTA as it pursues bilateral FTA agreements with Asian nations, such as a recently concluded pact with Singapore.

One reason for Tokyo's reluctance is that an east Asian FTA could open Japan to increased agricultural imports, which would anger the nation's politically powerful farming lobby, according to analysts

The U.S. economy is staring down circumstances similar to those that plunged Japan into a decade of stagnation. With each passing week, the similarities increase. In the 1980s, Japan was considered the model capitalist economy; in the 1990s, the U.S. held that distinction. In both cases, the good times ended with the bursting of a stock-market bubble, pricked, at least in part, by a nervous central bank. In both cases, predictions of a quick turnaround proved to be wrong.

To some analysts, the large amount of consumer debt outstanding in the U.S. is the ticking time bomb that could rival the bad loans dragging down Japanese banks. American households borrowed freely and dipped deeply into savings during the 1990s. In good times, with wages and stock portfolios rising, the situation seemed manageable. But now, as income-growth slows and mutual funds shrink, the burden could spin out of control. The Fed estimates that the household debt-service burden - the ratio of debt payments to after-tax income - rose above 14 percent earlier this year for the first time since 1987. At about the same time, the number of Americans filing for personal bankruptcy hit a record 390,064.

Black Blade: Hey tg, there's a lagging indicator. OUCH! Now that's both "Interesting" and "Grim." Time to get hard asset porfolio insurance while Gold and Silver are still cheap. It does not appear that we have seen a "Bottom" quite yet.

The one shared characteristic of fiat debt money is that it has a central bank to issue it and a set interest rate at which it is issued.

The mere presence of the central bank creates an inefficiency in the interest rate setting mechanism of the market where the central bank moves interest rates at anything from an honest best guess to a manipulative interference (too low - to benefit banks gaining market share and to help bail debtors, too high - in order to create havoc and force foreclosures in favor of creditors). Also an issue of creating debt traps with too low an interest rate, vs. shuting them with too high a rate.

The fiat monetary system with the least input from the decision makers is the highest quality one. Characteristically, the monetary system with the lowest bank market share in lending is the most likely to produce the "best" fiat money.

Furthermore, I often write of the problem of debt supply and demand balances where credit expansion into a positive balance builds future inflationary pressures, and contractional conditions into a negative balance release the inflationary pressures into higher prices through the elimination of the demand for money by the defaulting debtors. Thus a monetary authority that maintains a balance close to 0 but clearly negative would be certain of having released much of the built up inflationary pressures into price rises, while avoiding undue formation of future price rises.

The focus on after-the-fact price effects rather than structural monetary ones is the sure way to prevent a stable system, as during low price inflation periods the monetary expansion is allowed to proceed at any pace till prices rise, which brings upon the central bank the necessity of tightening, thus bringing up default rates, which release inflationary pressures built up during the low interest rate and low price increase period. Furthermore, the focus of the supply demand estimates would be best if on the external markets - outside the domestic jurisdiction of the central bank - rather than solely within the domestic arena. Thus the much more sensitive international markets in goods, direct investments, securities and currencies would react much more quickly than the domestic market.

Though there is no CB I know of that sticks strictly to this methodology, the Fed under Greenspan seems to have accomplished something like it for quite a while. The Japanese have been at the totally nether extreme, while the EU has dedicated itself to backward viewing.

Another odd issue, is that the EU, with no practical prior experience, has allowed foreign investment to turn its income accounts inside out through an absurd 13.5% growth rate in international bank lending to Europe since 1985. All this would have been fine if the EU counterside financial community were able to produce successful investments in its own foreign and domestic endeavors. But it can't and hasn't, though experience has improved the results some. Foreign investors in Europe still outperform domestic investors (by 1%, improved from 2% one decade ago), as is the case in Japan (was and remains a 2% underperformance). In US industrial investments, they have an ROA of 5%, vs. domestic US industrial performance of 7%. In the later 90s the US industrial investors lowered performance (due to over-investment) to 6%, European performance has not improved. In both the Japanese and European cases, the reason for this underperformance is the persistence in political rather than meritocratic allocation of control over investment capital, which is caused by direct government interference and participation in ownership (or direction, in the case of Japan) of financial institutions, and of industrial concerns.

The result is a 82 billion euro negative income account for the EMU, which did not seem to be improving as of the 2000 data.

Black Blade: Add insult to injury! These nonessential "Bones" are cast aside to let their bleached "Bones" rest on the "Bone Pile" and the corporate ghouls come back to pick at these carcasses. Of course they have themselves to blame if they did not prepare for changing times as any prudent person should do. "Interesting Times"

If you have no more to say on the matter of Reg Howe taking on a team of some of the most powerful interests in the US government and their financial friends. I suggest you owe Reg Howe an apology for the heroic fight he is waging. Yes he is waging it alone, because the rest of us are sitting here pontificating about it when he is actually fighting it. To call such a man a fool is beyond bad taste it is insulting. To question why he has not dotted every I and crossed every T by not having the arguements translated into German for the BIS is comical.

How much have you contributed to the cause bj? Perhaps you haven't read the research that went into his case or the effort it took to uncover the evidence to support arguements strong enough to perseveer against these formitable legal opponents. I think the efforts of Reg Howe and those assisting him are monumental in the elegance of their power and focus.

To say he is remiss in not anticipating every possible objection or requiement is to ignore the size of the task he has taken on. To have you take a cheap shot at a man who is fighting for such basic American values is unacceptable at least to me.

NEW YORK, Oct 29 (Reuters) - A mutual fund trade group said on Monday that investors pulled a record $29.51 billion from U.S. stock mutual funds in September, similar to earlier estimates from data tracking firms. The net withdrawals, a record in dollar terms, came as the stock market sagged before and after the Sept. 11 attacks on the United States. The previous record monthly net withdrawal was a revised $20.67 billion in March.

I've been too appalled to trust myself in responding. So thank you for speaking up.
It's time to say thank you to Reg, Chris and Bill for their great effort and it's time to help GATA, wherever possible.

http://www.levy.org/docs/stratan/recess.html...Barely a year ago, it was widely accepted and tyrannically projected that the U.S. growth rate had been permanently raised, the business cycle had been abolished, the good times were here to stay, fiscal policy should never be used as an instrument of policy, the budget should always be in surplus, and judicious adjustments to short-term interest rates by the Federal Reserve were all that was needed to keep noninflationary growth permanently on track....

http://www.usagold.com/Order_Form.htmlEd. Note: Here we reproduce a portion of the Commentary & Review to give new visitors an idea of what goes on at our client-only page. Access is made available to prospective clients here with a free, one-time registration for access codes. See above. You'll also gain access to our News & Views: A Quarterly Review of Forecasts, Commentary and Analysis on the Economy and Precious Metals.#

11/7/01

In Brief:

Gold firmed in the early going after a night spent in positive territory and yesterday's .5% Fed rate cut. All eyes are now on Europe as the European Central Bank meets tomorrow to decide the fate of euro rates. If the ECB should decide to either leave rates where they are or lower less than .5%, the dollar could find itself in trouble. As it is capital is moving in the direction of gold and the euro this morning with gold trading up $1.30 and the dollar treading water. "It is possible that with real interest rates now negative...investors could look for alternatives. This would be very positive for gold,'' metals analyst Lawrence Eagles at GNI Research told Reuters.

U.S. stocks can't seem to find the proper reaction to the bigger than expected rate cut. Yesterday they were up albeit half- heartedly. This morning they are down. The trend out of stocks and into savings vehicles continues even with interest rates at 30 -year lows. As Milton Friedman was reminding us long before September 11th, there is an inflationary consequence to all this easy liquidity. Now on on top of it, we have a war economy and war economies tend to generate currency inflations. Like I have said on more than one occasion, the times seem more like the 1970s than the 1930s -- and most of us recall that in those years of the Viet Nam War, the Oil Cartel, the Misery Index and double- digit everything, we learned first-hand the value of gold as a safe-haven. The western economy hung by a thread in those years, and barely survived to the tell the tale. This time around we might not be so lucky.

Traders report strong physical gold demand particularly from the Mid East and Pacific Rim, and this should continue to put a floor under the market. It remains to be seen how the gold paper trade in London and New York react to these changes in the financial landscape. The gold carry trade is pretty much a dead soldier, but the paper players still have outstanding loans to protect, so continued attacks on the price through derivative plays cannot be ruled out. Private investors on the other hand find the the gift-wrapped price very attractive and continue to accumulate. For those who understand gold for what it is -- a long-term insurance against either inflationary or deflationary threats -- the current price range is a God-send.

Even so, gold appears to performing its contrarian portfolio role. While most assets tumbled following the chaotic events after September 11th and remain unstable, gold prices have bucked the trend rising roughly 5% rise (at the current $280 price). At one point, it was trading the $290 level. Many investors, it would seem, aren't taking the downside of the New Paradigm as a temporary and benign event. Meanwhile, stocks, bonds and saving vehicles have suffered from the dual onslaught of sliding values and the shrinking real rate of return on the dollar and appear to have been dealt any even less appealing hand as of yesterday.

GATA's description of Mr. Howe sitting at the table by himself while an army of the money changers lawyers were on the other side reminds me of the opening to some of the years of the old black and white Perry Mason episodes. I can almost hear the music.

If the system fails us via OJ "dream team" lawyer technicalities getting the meat of the case thrown out, then the corrupt system has protected itself against the citizens right to know for many decades to come.

I'd like to rebut the suggestion here and elsewhere that Reg Howe's serving legal papers on the Bank for International Settlements by mail in English rather than by personal service in German at the bank's headquarters in Basel, Switzerland, was negligent or incompetent.

As I understand it, the service issue involves an interpretation of the Hague Convention for international lawsuits. The convention allows for mail service in English. It also allows for countries to opt out of accepting that provision, as Switzerland did. But Howe argued that, under Switzerland's own law, the BIS has special non-national status, and it is, by its own admission, increasingly an international organization, not a Swiss corporation, the more so now that its private shareholders have been expropriated and governments own 100 percent of the bank.

As a practical matter, the BIS was deprived of nothing by mail/English service of the legal papers. The BIS had what the courts call "actual notice" of the lawsuit, was able to file its reply briefs in court in plenty of time and indeed did so, had its lawyer in court this week, and uses English in its own internal transactions. A member of GATA's legal team joked outside court that, when the German translation issue was raised, Howe should have asked the BIS lawyer -- an American -- if he spoke German.

There are two theories about the judge's siding with the BIS on the legal service issue. One might think that the judge was just looking for any device, no matter how trivial, for getting rid of the lawsuit. Or one might think that he was looking to the future and seeking to foreclose a technical and trivial avenue of appeal in the event that the case is allowed to proceed. In fact, the latter motive is as common in court as the former. So take your pick. We'll have to wait and see.

In any case, Howe was not negligent, and the service problem can be fixed -- admittedly at some cost, the cost of a long German translation -- if the case is allowed to proceed.

That brings the number of people and groups whose assets have been frozen to 150.

The latest additions to the list range from an Islamic money exchange and its founders to a bakery. Bush is scheduled to announce the action this afternoon. ``There will be domestic implications to the announcement,'' White House spokesman Ari Fleischer said, declining to elaborate.

Targets of the assets freeze include Ali Ghaleb Himmat, who was born in Syria, and Youssef Mustafa Nada, born in Egypt. They are identified by the department as founders of the Al Taqwa money exchange, which is also on the list and is accused of funneling money into terrorist activities.

So far, 176 countries have pledged cooperation and 98 have issued orders to block assets of people and groups included in Bush's executive orders. As of last week, the Treasury Department said $24 million in assets had been blocked worldwide. That number is expected to grow as the assets of other frozen accounts are verified. "

BR-Cut the enemies supply lines of fiat worldwide and the terrorist's only alternative is to apply for welfare or go to work.

Worker productivity rose in the third quarter by the largest amount in more than a year as businesses, coping with the sour economy, slashed workers' hours at the fastest pace in a decade.

http://www.foxnews.com/story/0,2933,38240,00.html"Productivity - the amount of output per hour of work - increased at an annual rate of 2.7 percent in the July-September quarter, up from a 2.2 percent growth rate in the second quarter, the Labor Department reported Wednesday.

The third quarter's performance was better than the 2 percent productivity gain many analysts were expecting and marked the biggest increase since the second quarter of 2000, when productivity soared by 6.3 percent.

Productivity rose in the third quarter as businesses cut workers' hours at a 3.6 percent rate, the largest drop in hours since the first quarter of 1991 when the country was in the depths of its last recession. Output declined at a rate of 1 percent, the biggest decrease since the first quarter of 1993. "

BR-An example of Incentive--See how much harder the workers that did not get laid off now work. The ability to continue to put food on the table is quite a motivator.

Latest from ebayThe physical market in silver from coast to coast in the United States.... A pretty good indication.
Note that there is only a little correlation with finished auction prices and (recent) paper spot and this is more one of direction. Generally down, but not significantly so:

jb (msg#: 64801)--"GATA it is inexcusable not to deliver the papers in german and by a representive to BIS,any lawyer would know that.also only a fool represents himself in court. not much more to be said than that."

What is "inexcusable" is some "fool" who does not know that Mr. Howe does NOT represent himself, he selflessly represents all of us Goldbugs. (And with a naive statement like your post, you're no goldbug, I don't care how much of the stuff you own)

I suggest that you spend your time future attacking the other side, they need it. (unless of course you are one of them)

There are very few people in this world that I have even an iota of trust in and respect for.One of these people,certainly close to the top of my list,is Reg Howe.He has put his reputation,his livelihood and perhaps even his life on the line to fight the entrenched,bottomless resources of the monetary elite.

Perhaps criticism of his strategy is warranted and could prove helpful.I always felt that the legal action was a longshot at best and the currently highly charged atmosphere obviously does not further a cause for freedom such as his.Suggestions for furthering his cause constructively should be encouraged,catcalls and woulda/coulda /shoulda's from the bleachers really have no place in this debate.

A true American hero,fighting for the ideals and vision of what America should really be and what it should represent to the rest of the world.

"Still,the ultimate goal of us gold bugs is not the destruction of our enemies.It is honest money with permanent value.It is constitutional money protecting our freedoms and restoring integrity to our political institutions.It is an international payment system that creates a level playing field for all nations to trade, invest and pursue their economic development.It is in sum,a world where the expression "as good as gold" is not a reminder of past glories,but a statement of expected standards."

We're not getting this vision from the charlatans currently in power in the USA.Every day that goes by,every new freedom restricting law they pass and every blind bomb they drop adds a little credence to that.

All the power to you,Mr. Howe.Your cause is noble and your objectives cry out for fulfillment.May justice prevail.

To increase GDP, the amount of produced goods and services-unit can increase or the price per unit.
Debt can decrease by paying it back from profits or default and write off.

Today, the declining GDP is the result of a decline in produced units and their price. The decline in debt is due to refinancing and declining interest rates.

What can bring the GDP/DEBT, proportion, back to normal, as a condition for renewed expansion possibility ?
1/ - increase in produced units ?
2/ - increase in price per unit ?
3/ - debt write off ?

4 $ of debt were needed to increase the produced units by 1 $. So, I don't see how we are going to stimulate the production of more units, without further digging into debt. Therefore excluded, dispite the patriottic calls.
Default and debt-write off is excluded as well. Should mean total collapse.

So were are left with the ongoing management (final phase) on that total load of debt and the untouched increase of price per unit ! Voila, as simple as that.
There is no way out, but hyperinflation, (price per unit) to get it restarting again.
The increase of the price per unit is in function of how much debt can be eliminated and how much units will be produced (and consumed).

A continious declining GDP, makes the GDP/DEBT, more and more menacing. Strangulation !

Thanks -- I read it, and will again. We're still weaning people from that "inflation as consumer price rises" view, which it also was, deceptively, during the 1920s. Rather than the issue being "integrity of the money supply." You always introduce a few new wriggles, which take me time to sort out and integrate. I don't want to ask the first questions of the top of my head, but see if my integration gets me somewhere first.

Is Europe entering the battle of contradictions between monetary and national fiscal policies? Or is that battle already trumped by ECB independent powers? You realize that all of this is falling on the barren soil of our near-total ignorance of European political economics. You have a core of study, and even extrapolations from it, while many of us here have only begun to understand our own Fed/monetary system in the past few years. Most of our adult lives have been led in the fantasyland droolings of our youthful learning.

Since you and FOA introduce Europe as the subject, can you resolve for us how much of the issue is Europe's success economically ex the Euro, vs. FOA's assurances that the Euro carries its own independent power, from which Europe will benefit as a side effect, perhaps regardless of its inefficiencies which you critique?

FOA and ANOTHER talked many times of the EU, and the Gulf Royals insisting that they do not want to continue within the dollar reserve system because of its "dependence on the economic performance of the US". The analogy they provide is that it is like using the bonds of just one neighbor for your money. Such that if the neighbor is economically challenged, the value of the bonds is nil.

Here, as is often the case, is another economic fallacy and a single party's view of the meaning of the risks it took in participating in the current system.

First of all, it is the distinct and nearly singular position of central banks that they are stuck with US government bonds as their largest asset that is not a domestic credit acceptance of some sort, or gold. Few others hold any significant quantity of Treasuries, excepting US banks. It is uniquely their position because of the IMF agreements, but it has been quite a while that they could have purchased other dollar bonds for reserves, but have not. They could have kept cash balances with banks other than the Federal Reserve, but did not do so. Quite contrary to FOA's claims, the main reason that Treasuries have not accumulated at the central banks since 1997 is two fold: (1) The US government was not issuing any more of them on net. (2) Nobody has enough dollars to buy them with even if there were any more to buy, since 1997 there has been a fall in foreign CB dollar deposits at the Fed, which is very much related to the then ongoing dollar credit contraction in emerging market economies. This contraction continues in its deflation as the external dollar debt supply demand balance is still in severe deficit, the latest casualty of the dollar scarcity being Argentina's currency board (something that a net external debtor nation should never even consider).
The other side of this can be said to be the US gov and the Fed reacting to the threat of no further allocation of credit by the ordinary creditors (EU, HK, Japan, etc..). Which would be historically correct if your mind is stuck in the 1980s. But the supply demand balances are so overwhelmingly tight that it is extremely unlikely. As a case in point one should look at deposit balances with the Fed, the core cash holding of the dollar reserve system outside the US:
http://www.federalreserve.gov/releases/Bulletin/0901assets.pdf
1997 1998 1999 2000Dec. 2001 Jan. Feb. Mar. Apr. May June July
457 167 71 215 199 196 70 101 86 102 84

It should be obvious here that since 1997 the world has been starved for dollar liquidity, which is essentially what the Asian crisis was, what the Russian default was, what the Brazilian Real float was, and what the Argentinean problem is.

It is essentially the problem of CBs that hold treasuries that their assets depend on their value upon US economic performance. They could have taken other dollar assets, say dollar denominated Argentinean government bonds. Perhaps Korean government bonds would have been in order, Ford Acceptance Corporation paper too, perhaps Deutsche bank dollar paper. They chose to hold dollar paper of the US gov. because (1) that is what they had historically, (2) the US gov. can have the Fed buy all the Treasuries at a set dollar price, if the need ever arose, thus there is no default risk on the bonds.
The CBs face another danger: a drop in the value of the dollar itself. But then what is it that dominates dollar demand in the world markets? What affects supply? Why should they be afraid of supply overwhelming demand? Is it actually US performance that dictates the dollar's supply and demand functions?

First of all, dollar supply comes to the world markets from these sources:
1. US imports of goods and services
2. US investor's Portfolio, and direct investment abroad
3. Dollar borrowing abroad in the Eurodollar market.
4. Non bilateral trade imports and outgoing portfolio and direct investments of countries other than the US.
5. Income earned from US portfolio and real/business assets owned by foreign investors.

Dollar demand comes from:
1. Demand for US exports
2. World investor's Portfolio, and direct investment in the US
3. Dollar debt repayment.
4. Non bilateral trade exports and incoming portfolio and direct investments of countries other than the US.
5. Income earned from foreign portfolio and real/business assets owned by US investors.

Most people are not familiar with 4, so I will explain in short:
Though statistics are very often presented as if trade is between individual "countries" on a case by case basis, that is not at all how it works. People and their corporations do trade. Neither are actually very country specific in where their imports come from or their exports go to (individual people) and corporations involved in international trade have operations everywhere, where they both buy and sell. Where the contracts are actually negotiated is in an international marketplace where many bids and many asks converge and direct where a shipment from one place will arrive, and where an order from another place will be filled. The international marketplace is a single area, and trades in a single currency: the dollar. It does not do so because the dollar is particularly great, but because that is what the markets used the day before: that is how prices were quoted, and that is how long standing contracts were written, and because switching to anything else to denominate trade requires markets to undergo an extremely costly readjustment to renegotiate contracts into something other than the dollar. (Which is why the euro introduction can not make the slightest difference in the market's preference not to move to settlement in euro, in gold, or in anything else.)

The way the international marketplace operates in redenominating contracts from dollars to individual currencies is through derivatives sold by the domestic banks of the desired currency. Thus Exchange rate derivatives have a US bank obligated to supply the dollars for someone who wants to exchange a future euro revenue, and an EU bank to supply the euro for someone who wants to exchange a future amount of dollar revenues into euro. Thus a "bilateral trade" between "two countries" that are not the US is actually composed of a sale of one item into the international market for dollars payable within 30, 60 or (most commonly) 90 days, the sale of the second item for similar terms, and the purchase of these items from the same "market". The individual currencies needed by the sellers (to pay costs at home) are either purchased when the dollars arrive, or are contracted by a derivative with a local bank to buy a certain amount of dollars with the particular currency. The buyers, have the local currency, and either buy dollars on the cash market, or contract to buy dollars by the due date by sale of the currency at a set exchange rate. The latter contract would most likely be done with a local bank that will purchase a similar contract from a US bank.

Why is it done this way rather than the two parties doing a direct exchange of their goods and settling only the difference? Because there are no such two parties. The chances of them finding each other is nearly nil. The proceeds of the sale of coal from a Scotch mining company in the UK supplying a Belgian steel maker is used to purchase steel from a neighboring supplier who bought it from someone in Canada. Thus the coal for steel deal would only occur if the particular steel produced by the Belgian steel company and coal user fits the exact need of the coal miner, and if the coal from him would be of the right quality and suffice for the steel maker's needs.

On net, portfolio moves and direct investment do not actually add to dollar demand nor to dollar supply directly, nor does the international trade with parties outside the US in goods or services. These do add to the liquidity requirements � as to how many dollars need to be in cash in order to service the trade volumes. Since the markets are moving to same day settlement, the answer is that very little is necessary, only enough to cover a particular day's net imbalance in settlements. Some $100 billion.

Going back to the supply and demand figures:

The order of magnitude involved in each is given below:

1. US Imports and Exports: $1.8 trillion, $1.4 trillion, supplies a net of $0.4 trillion
2. Investment flows to and from the US: $0.69 trillion incoming, $0.33 out, net demand: $0.36, $0.29 including treasuries.
3. Dollar borrowing: Developing nations: -$90 billion (about +$140 billion in the mid 90's), Europe: about $200 (the balance of 400 billion in euro and some sterling)., Japan: -$40 billion.
Interest due: Developing Nations: $140 billion, Europe: $250-300 billion, Japan, about $40 billion.
(The above does not include bond market debts, which add 30% to 50%, but is in trend with bank data. Including non-bank lending, we have about -$130/$200 bil supply/demand for Developing Countries, $250/$350 bil for Europe, -$45/$45 bil for Japan)
5. US net income flows: supply of $5.5 billion

World Trade Balance: Exports of all nations less imports of all nations: -$250 billion,
down from �$100 billion per year in 1981-1993, and �$30 to -$50 billion in 1995-6).

During the recent peak Developing markets investment boom, in 1994-6, Supply stood at roughly $450 bil per year, and demand stood at about $400 per year, with the excess of $50 joining the $80-90 bil supply from the US trade deficit, and $60 bil in investment supply from US net investment abroad, to provide a $200 billion annual excess supply (about a 4% annual excess), which brought dollar values down going into 1995.

In terms of internationally traded goods, looking at the CRB raw industrials spot index, the dollar's purchasing power dropped 20% during this period as the index went from 270 in 1992-3 to 340 in 1995-6. Since this period, the dollar strengthened in accordance with its supply and demand balance going from the 340 range to under 220 recently, a 55% rise over 4 years, and 11% annual strengthening in the dollar. This brought on by an average dollar deficit of 8% during the period, with the peak deficit period of about 11% during the Asian and Russian crises, with a momentary peak of 14% in the quarter when the Russians defaulted.

Thus the scale of effect of the US contribution to the supply and demand conditions in the international markets is on the order of 30% of the net supply during excess supply periods, and nearly none of the demand, and is providing 60% of it during this contraction period. Thus on the "big float" supply side, during expansionary periods, the US is a minor player. It is only during contractions that the US is there to supply a market for the world's goods and provide the dollars that keep dollar debtors from going bankrupt.

There should be no doubt that the US enjoys an "exorbitant privilege" in the dollar reserve system so long as the dollars abroad can not be created by a "lender of last resort", while within the US there is such a lender. This produces a situation where foreign borrowers can only repay debt incurred in building business by borrowing further in the open market, or by exporting products out of domestic markets to international markets, and particularly to the US. However, within the US, banks have access to short term borrowing at rates set by the central bank, and thus their clients need not sell at distressed prices as often as would foreign debtors in the same markets, and have access to credit lines provided by US banks instead of having to borrow on the open market based on creditworthiness alone.

Much has changed over the last few decades as US banks have shrunk their market share relative to the open markets and are far more accountable for their errors in pushing debt to lesser credits. Furthermore, they face competition for their smaller clientele by small private investment pools that are cherry picking bank's smaller customer rosters. Their depository clients can also run their accounts outside the fixed value bank accounts into a broad variety of investment funds from money markets (these types of pools were common before the Fed was founded, but the Fed's first function was to undercut the interest rates they charged by printing up money at lower rates) to bond funds to stock funds. Within these markets the depository client did what he was doing at the bank, but this time with an opportunity to actually invest rather than provide monetary savings that were invested behind his back and without his control.

But there is a counter to this in that foreign borrowers and their lenders would have to be aware of the situation and could discount it in making investment decisions. But we know well that this has not been the case in developing markets. The foremost reason for this is the insistence on domestic control of industries built with foreign resources. This insistence on local control was exacerbated by the "crony capitalist" attitude that allowed foreign investments to be funneled only through the government ruler's friends and family, and central planning decisions as to which industries curry the government's favor because of their "strategic importance" and which don't. The most significant result was the reliance on debt, which maintains control in local hands, rather than equity. As a result, fixed cash flow demands characteristic of debt were imposed by local gov. authorities rather than investors who would have been happy to take an equity stake which does not obligate the company or a potential state guarantor to provide a particular cash flow. This was the source of the problem in Europe earlier on, and in Japan of the 80s and 90s, and was the problem of Asia these last two decades, and of the bulk of Latin America's economic history.

The insistence of Mahatir in Malaysia to complete an auto production project when the global market in low end autos is practically glutted with over-capacity, is a case in point. That Indonesia has produced similar fiascos nearly everywhere one looks as Suharto and his cronies built empires of bad investments, as did the Philippines under a series of corrupt successors to the unfathomably corrupt Marcos, is the reason for the 97-8 Asian disaster that we are so familiar with. The current anti-American and anti free trade protestations from these countries have most of all to do with the unwillingness of the governments to allow their local cronies to relinquish equity in their debt besotted businesses to the lenders. Instead, they are seeking to "depose the dollar" and erase the debts under the moniker of reducing dependence on US export markets. There is nothing more certain as a counter indicator than the unanimity of political voices in Asia, the ME, and in Europe, particularly regarding Russia � EU relationships, predicting a dismal economic future for America. Their certainty makes it quite impossible for this to occur, because this unanimity among politicos is a sure indicator of a very crowded trade.

The maximum load per truck I would think is about 10 tonnes. This would suggest about 75 trucks to haul only the silver away. The article also implied that policemen and firefighters hand loaded the trucks. To move 757 tonnes into a truck or trucks would require dozens of people and probably a week in my opinion.

What am I missing? Could this just be a diversionary tactic to distract attention from the actual silver and gold movement which is still to take place? Could there have not been that much gold and silver as previously published?

Netking > Validity? . . . A "Wag the dog" production for publicity? . . . or just the first two Brinks truck loads of many? The truth is as they say . . . out there.
- Netking.

If you want to keep it simple you need to define whether stats are to be nominal, is the data seasonally adjusted, done in constant dollars, what the debt consists of, and are the statistics at the various countries statistics departments up to date or estimated which will be adjusted later.

RE: A/FOAHello ORO. I feel compelled to point out for the reading and thinking audience here that at one time and for a reasonable period of (that) time, your own thoughts on the A/FOA commentary seemed to me, to be, rather consonant (with FOA). What has changed your opinion so and engendered such a vehement opposition and denial of their credibility?

You have a very good and overlooked point. Two Brinks trucks could not have moved out the silver. I would put the carrying capacity of these trucks at 10,000 to 15,000 pounds each. From my calculations, the two trucks featured on the television news could have only moved out the gold. I based this on there being 31.1 grams to the troy ounce and a stated figure of about 300,000 ounces in the vault. About 9.5 metric tonnes of the yellow metal. (These figures are rounded)

So if the silver wasn't moved then maybe it wasn't there to begin with! Wouldn't supprise me if that was the case.

"Enron was to be a partner with Goldman Sachs in an electronic gold exchange. In addition to being a huge energy player, Enron is well known to have massive derivative positions. Enron is desperate for cash. It would not surprise me if they are also short a large quantity of gold and have been using the practically interest free gold loan money to help finance their recent problems."

"If that is the case, look out. This could be the straw that breaks the Gold Cartel's fraud scheme, should they be forced to cover. The gold carry trade, or just borrowing gold at 1% interest rates, has been the greatest financial dealing of all for the past 7 years. Yet, no one admits to doing it."

"We know why and someone is going to get caught by over staying their gold borrowing welcome. Maybe it will be Enron." END

Comment: "Forced to cover"? Too well-connected to be forced to cover? Forced to dip into some slush fund? Forced to turn to the taxpayers? Forced to perpetuate the fraud with 'drive by' derivatives? Forced to wag the entire kennel? Take your pick, pay me now or pay me much more later.

I bet that...What was seen was likely the last two trucks pulling out. If I was hauling away this weight I certainly wouldn't call attention to it at the beginning of the operation - rather at the end, and do most of the work at night.

Kind of fits in with the 'stories' from the mayor of New York (will not attempt the spelling) with the $375 million dollars and the press number of $220 million and the Comex number of $275 million. Hey, the numbers only differ some 30 or 40 percent??

So what the hell, a couple dozen strapping firemen carried 750 tonnes of metal UPHILL, SEVERAL STORIES through busted debris in an afternoon? Let's go a little further, they probably REFINED it on the way up, you know, it was bent, dented and dusty?

And what the hell, EVERYONE was convinced that the metal was stranded underground for months and suddenly, suddenly the metal was extracted in a week?? What the hell, let's have breakfast, some monster pancakes and carry 757 tonnes of gold and silver to the 'surface', have a beer after lunch and call it a day, SHALL WE?

Lying bastards.

Good observation Netking, excellent job.

This gold thing, whatever the hell it is and now the war issue, wouldn't it be handy to see a view of history 10 or 20 years into the future.

Lots to chew on there, and I'm trying to get your dollar demand figures. They are important because all we usually hear is the trade imbalance (implying dollar excess -- but you say that was a mid-90s characteristice), and FOA follows pretty closely in that line of thinking.

I didn't add the figures together in that section because it already seemed way over 460. But Europe, aren't they a net creditor anyway -- so where is the dollar demand? Or have we just got our signs reversed?

And these are annual, net, additions to existing balances, right?

Additional curiosity while I'm at it: if this is a time of dollar strength in each of these categories (vs. mid-90s in contrast) what would be the trigger to weaken any or all of these dollar strongpoints?

Sorry about the quadruple post (is that a first?), new high speed ISP locked up (beauty, eh) and like a registered moron I just kept pounding ENTER. (HIT ANY KEY TO CONTINUE!!!; Axe over monitor)

Slingshot:

Thanks man, needed that; ugliness level just dropped a notch.

Leigh:

Congratulations on your recent 'win'. I have great respect for you. You are the stilling waters on this forum. I envision you somewhere between my mother and a 24 year old fox and please, (blush) consider either to be a compliment.

"...This hierarchical classification signifies a grouping of states that are similar to each other and superior to the 'third-class' countries beneath them. The 'West' or the 'First-World' is similar in terms of the Christian religion and being white (for the most part), and the 'Third World' is predominantly non-white and thus 'inferior' and uncivilized. It is implicitly acknowledged and �politely� enforced by the West that white Christian nations are superior to all others and so are �God-appointed� leaders. This ideology has its history in the fall of the Roman Empire, and the subsequent success Europeans had in dividing the world among them. The moral justification to subjugate people was provided by the 'Holy' Bible..."

http://www.forbes.com/2001/01/30/layoffs.htmlThe bodies keep piling up as more nonessential "Bones" are cast aside. Boeing reports that they will speed up the layoff process that they announced a few weeks ago. Boeing announced that they will layoff over 30,000. Now that's one big "Bone Pile."

MEXICO CITY, Nov 7 (Reuters) - Grupo Mexico , the world's No. 3 copper producer, became the second Mexican company since the Sept. 11 attacks on the United States to say it will be unable to meet its debt obligations because of market turmoil. The mining and railroad company told the Mexican Stock Exchange on Tuesday it would have trouble making an $84 million pre-payment on a revolving credit that matures Nov. 10, 2002. The credit was taken out in 1999 to help finance Grupo Mexico's $2.25 billion acquisition of U.S. copper company Asarco Inc. said the letter to the stock exchange.

Grupo Mexico said that the financial difficulty came because of the steep fall in the price of copper -- now trading at its lowest level since 1987 -- and other metals produced by Asarco and other Grupo Mexico units.

Black Blade: This is no surprise. Phelps Dodge (PD) another copper producer hit the skids when higher energy costs resulted in layoffs and reduced output. Rumors persist that many major miners in copper, silver, and gold will be out of business or acquired within the next 5 or 6 years. These include Grupo Mexico, Phelps Dodge (PD), Barrick Gold (ABX), Newmont (NEM), and Placer Dome (PDG). Virtually all these companies have gutted their operations and are high-grading the ore without replacing reserves at many operations. After the high grade is mined there is only marginal ore or high-grade ore that becomes uneconomic due to engineering changes. I saw much of this firsthand and it does not surprise me that we could see many of these companies cease to exist in the not too distant future. If metals prices were to rise many companies would still be in serious trouble due to large forward sales positions (and many counter-parties will have to eat their paper as default is inevitable). Many of these companies are backed into a corner and the only avenue left is to merge and acquire other miners on the cheap to satisfy old forward positions or to engage in new forward sales. As prices fall, there is little incentive to lock in to very low forward prices. Then the "House of Cards" falls in on itself. There is very little if any new exploration activity - this will eventually result in reduced supply and higher prices. - "Game Over"

WARNING THAT MAIL service is on the brink of
financial disaster, postal managers are preparing to ask
Congress Friday for a huge bailout, about $6 billion. The
precise request is to be determined Wednesday night.
Half of the money would be for new equipment to
sanitize mail and protect workers. The other half would be
used to make up for lost revenues, because people are now
sending less mail.

IF NOT NOW OR QUITE SOON FOR AU THEN WHEN OR NEVER? WE ARE WITNESSING MONETARY AND FISCAL MISMANAGEMENT ON A GRAND SCALE IMHO.

http://www.menewsline.com/stories/2001/november/11_08_4.htmlArab diplomatic sources said Saudi officials and diplomats have sent messages to allies that the unrest could erupt when the Islamic fast month of Ramadan begins later this month. Ramadan, which is set by the lunar calendar, is expected around Nov. 15.

The message has been relayed to the United States through Pakistan, the sources said. Pakistan is regarded as one of Riyad's closest allies and both supported the Afghan ruling Taliban movement, now under U.S. attack.

The sources said Saudi Arabia envisions huge Islamic protests of the war throughout the Middle East and the Persian Gulf. The rallies would then sweep the Saudi kingdom, several of whose leading clerics have condemned the war.

Debt is the consequence of a lack parity, and the lack of dollars in non debt form. All money is debt money, there is no other source except to borrow it into existence. Debt can not be retired with debt dollars. The sum of all borrowed money must be repaid with a greater amount of money then that which was borrowed because of the cost of usury (interest). The sum of all parts of anything can never be greater then the whole. Therefore debt must be repaid with more debt. An example of this is the pay down of the 30 year Treasury bonds with bonds from other Government Sponsored Enterprises (GSE's). All currencies are dropping in value. The currency depreciations serve as a tariff. Currencies drop in value against basic necessaties (everything that can not be done without) and credit creation gold we the people are not allowed to trade in. Credit creation gold is a basket of goods that consists of metals used in industry, fuels to power industry, housing for people and buildings for industry, foodstuffs to feed people consisting of grains and meats, and productive land be it forested or cropped. All this is represented by credit creation gold. This credit creation gold can not be used for commodity gold. Central Banks around the world are selling the publics gold so the owners of the very same banks can buy this commodity gold and use it for credit creation gold. This gold is priced based on needed reserve requirements which must be around 5%. (N)x5=100. N=20x$280=$5600. No bank in my area has a 5% reserve. It is more like 2 to 3%. That puts the credit creation gold much higher. We the common people of this world are serfs or slaves and we need to get used to it.

Is this post the Rosetta stone for all of us amateur economists trying to understand perplexing US dollar strength?

I remember Mr. Moto at piraz.com mentioning US strong-arm tactics with the Asian tigers to open up their debt markets in the mid-90s.Is this part of the Rubin gambit that led to all the ramp-ups in various charts that all started at around the same time?If this dollar debt demand is so immense and trade flows are falling world-wide,what is the endgame?What of all the dollar reserves in Asian central banks,could they not convert these reserves to euros,thereby freeing up dollar liquidity?Or would that trash their currencies?

Please don't feel obligated to answer these questions,I obviously have to do a lot more research on my own.Thanks for the brain stimulation.

WASHINGTON (AP) - The Bush administration is investigating Islamic money exchanges, including some in the United States, suspected of funneling millions of dollars to Osama bin Laden's terror network. German authorities say some of the financial activities helping terrorists appear to have involved outlets in the United States. Administration officials said one of the exchanges, known as hawalas, appears to be owned partly by bin Laden.

Black Blade: I saw this one coming. Hawalas work very well to transfer cash quickly and anonymously. If there is anything that the government hates, it is the inability to control and track the lives and finances of everyone. Hawalas have been around for hundreds of years and were used as banks for traders in the Middle East and Asia. But bank secrecy has been under fire the last few years and banks in Switzerland, the Caribbean, and other countries have caved in to US pressure. Now a convenient excuse has come along to shutdown the Hawalas. Does Gold confiscation seem so far-fetched now? I don't think so, but then again - Hmmm�

The events of 9-11 showed clearly that gold and silver will utterly be pounded until the wheels actually come off the cart. It will never be allowed to rise above $325 until the insane machine I call 'Alan Greenspan and Friends' is removed or totally loses the handle, in which case we will have a collapse. In either case gold value will be extremely 'subjective'. I'm sure they think they are doing us a favor.

Perhaps it is time to introduce myself as I have been an observer of this discussion on a daily basis for many months now. I commend the calibre and sophistication of dialogue I read here but I admit that I was disappointed when I read the criticism of Mr. R. Howe yesterday. It is too easy and simplistic to offer negative criticism; it is much more difficult and time-consuming to offer constructive, critical, well-researched, and justified opinions and arguments on a subject - the latter, fortunately, is mostly what I see in this discussion group. We should always avail our opinions to the responses of others and never believe that we are so "right" as to shut off discussion. Kudos to those of you who took a stand today - all that requires negativity/evil to flourish is for good men to remain silent. I am a Canuk from Vancouver and am a long-term gold bug. I am not in the investment field professionally, but do manage my own portfolio. Hence, when you hear from me I will likely have more questions to ask than opinions to offer - patience please. Keep up the great discussion - I am sure there are many people like myself who read, analyze, and learn from the many varied and informed opinions here. Thank you all and ps - when I do contribute, it will be from a "woman's" perspective. Cheers.
Waverider

http://www.insiidetrack.com/Gold & Silver cycle timing snippets making market predictions & integrating innovative cycle work from the likes of W.D.Gann, Fibonacci, Biblical & natural cycles with proprietary technical indicators to give "an interesting perspective"; (Interestingly, per below back in July this year Silver was picked to have a target bottom of $4.11-$4.15 during 2001 - Netking)

*** 2001: A Cycle Odyssey *** (written July 2001)

- Gold/Silver Cycles Bottom in 2001 & Surge into 2003

". . . Gold & Silver should bottom this year and then see a strong surge in the end of 2001 and the beginning of 2002. . .

In the last 100 years, Silver set 10 important (what would be termed 'major') lows. . .70% of the major lows in Silver of the last century occurred in the '01' or '02' year of the decade (1902, 1921, 1932, 1941, 1971, 1982, & 1991). 2001 - 2002 fits within this ongoing sequence. 2001 is also both 30 & 60 Gann/geometric years from the 1941 & 1971 lows. It is a Cycle of Time 19 years from the 1982 low.

. . . the month of August represents a 50% retracement in time from the 7-year/84 month rally between Feb. '91 - Feb. '98. The 3.5 year/42-month drop from the February 1998 peak represents some well-documented (as well as Biblical) cycles of significance. So, between late-July & early-August, 2001, Silver will have entered the 540th week from its Feb. 1991 low and the 180th week from its Feb. 1998 peak. Silver also just completed the 90th week from its September 1999 secondary ('B' wave) peak, 135 weeks (3 x 45) from its December 1998 'A' wave low and is at 210 weeks from its July 1997 low.

So, there are strong decennial ('01 or '02 year of each decade), yearly (30/60/19/7/3.5-years), monthly (84 & 42 months) & weekly arguments for Silver bottoming in late-July or early-August. . . the month of August is the perfect contrast (180 degrees on a calendar from the Feb. 1998 peak & Feb. 1991 low) for a low�the time is ripe for a sharp surge in Silver. Silver is still within striking distance of its major downside objective (411 - 415.0/SI), and the HLS of the current week coincides at 411.5/SIU." [� ITTC - August 2001 (7/30/01) INSIIDE Track]

Welcome to another with that "un-American" north-of-the-border perspective. And those of us who associate you with your location in Vancouver will visualize the beautiful views you are undoubtedly enjoying out your windows as you post to us, helping to brighten the ideas we share back to you and all. The fact that you bring feminine force to our dry deliberations should help us to keep our words in line with our ideals even more than we do already...

Let us not waste time and energy in investigating all those endless statistics, and just look at the fundamentals.

*Increasing Total Debt, strangulates, declining total GDP*.

120% debt to GDP for Japan (and Belgium as well)! And knowing that a lot of hidden debt, has not been taken into account. US debt 6 trillion against 10 trillion GDP ? Hidden reality is far more worse than percepted. Impossible
to define *all* debt (or service-volume) against the global 40 trillion world GDP. It just keeps on detoriating, faster.

Interest rates are reaching a 40 years record low. Much too little, much too late ! What do we need statistics for ?
Thanks for replying.

Yes Sir, as somebody once said to me; "I don't know how some of those cycles work, but they jolly well do!"
At the time we are in the heat of the battle it's hard to pick absolute bottom, but easy with the old 20-20 hindsite in place(grin). Having said that I believe we are right that end of 2001 into 2002 is golds time to awaken in earnest and the cycles/charts confirm this to us for sure.

PS: Belgian, was it your airline in the news a few days back, if so will it survive if they undertake a restructure? We've just "been there and done that" for ours too.
- Netking

The problem of Asia's developing markets has been the problem of Japan. To demonstrate, let us take the ownership structure of the industrial conglomerates that did the work of the modernization of Japan from the Meiji onwards. The structure was essentially of a bank around which were industrial companies, the banks were centered around a central bank and a stock market. Access to bank lending was restricted to the industrial companies of each conglomerate. Access to the bond and stock market was restricted to the banks. The structure was copied from the diaries of British and French bankers that assumed a superiority of technical expertise among the people with the exclusive privilege of banking. These same technocrats were loyal to the founding families of the conglomerates and populated the government ministries designed to prevent competition among them and protect them from foreign competition.
At the low level, were tens of thousands of small manufacturers funding themselves through cash flow and by borrowing from underworld loan sharks. The latter were, of course, unprotected by privilege and thus remained both solvent and without the need for occasional restructuring of the debts. Thus the Yakuza became the more stable portion of the Japanese financial system and their power grew to the point where they had infiltrated the upper strata of all of Japanese institutions.

Most of the time, the Japanese system did not take on much foreign debt and allowed very little foreign direct investment. Banks within each conglomerate were required to lend to all subsidiary organizations without prejudice (i.e. without regard to risk and credit quality) and without limit so long as the books balanced. Because of mark to market regimes, the banks could lend to real estate operators and buy stock, thus pushing prices of both to rather absurd heights. The stock issuers, namely the other conglomerate members, were able to "focus on the long run" and fight for global market share, while a primitive and over-regulated retailing system meant that local consumer prices were persistently higher in Japan for the same products available abroad and each car sold abroad at a loss could be have the loss covered by hiking local prices. Toyota, Subaru, and Honda, being (for the most part) outsiders to the conglomerate families that ran Japan managed to do best abroad, which brought them strengths at home once the labor force got stretched and competition for labor got started. The age differences among workers in the successful and less successful companies quickly showed up over the 80s and brought the lesser companies near ruin, where US companies GM and Ford, oddly enough, are trying to save them.

Growth of Japanese industry was extremely focused on "strategic" goals and had benefited from a number of US government blunders, most notably the anti-trust case against the RCA transistor patents, which made licensing the technology to Japanese electronics producers preferable to doing the same in the US, which was pretty much impossible till all the legalities were done with - by which time Japan was ready with overwhelming production capacity. The second item was the auto industry, encrusted with barnacles and dust from decades of near immobility, protected from competition by a network of state gov. protected dealerships and by collusive practices that led to such ideas as "planned obsolescence" to force people to buy a new car 3-5 years after purchase.

The old French banker's schemes satirized in "The Protocols" were applied within Japan for the benefit of the families that ruled Japan. With exclusive reign on fiat debt money banking, they could out-finance any local competitor and overwhelm him by selling competing products at a loss till the competitor keeled over and closed, and his operations taken over by a crony. The crony capitalists could hide the losses in a veritable flood of loans from the banks, thus distributing losses to small Japanese savers who could have financed successful competitors to them.

The motive for Japan's industrial development was maintenance of the strength of the ruling class. The goal was power against the West so that Japan would not suffer the de-facto dismemberment that China went through during the late 19th century and earlier 20th. Thus it became the local imperative to prevent foreign ownership of Japanese industry. Not because the Western companies were particularly colonial (which they were), "bad" for the people's welfare, or somehow malicious, but because they were not the current ruling class, and were a challenge to the traditional feudal power structure and the ruling families at its top. Economic development was taken as simply a tool of power, as opposed to the Western attitude of power being a tool of economic interests.

This is the heritage left to Asia as it followed in the footsteps of Japan, a ready made route with predefined steps, with little risk and practically no innovation. The purpose of which was simply to provide economic development which would keep the ruling elite in its place and improve its lot. The same opportunity for profit from employing a near Neolithic workforce in 20th century industry was obviously seen by many.

The choices facing a subsistence culture seeking development are few. In order to obtain the equipment and expertise they need in order to develop economically, they need to either borrow abroad with little or no collateral, or allow foreigners to build foreign owned plants. Borrowing abroad with no collateral is very expensive. But without this, ownership of much of industry would be foreign until local savings are sufficient to buy off the foreign owners. The result is that the cronies of government make deals which allow minority ownership by investors, and saddle companies with debt to finance the rest. Thus cronies obtain equipment and technical expertise from abroad with no capital of their own, while maintaining majority ownerships of enterprises. Furthermore, they use government power to prevent unionization, to prevent other foreigners from entering, and to close down competitors. They also use banks to funnel the public's savings exclusively into their hands.

Of course, the cronies, lacking in merit, eventually run much of the new industry into the ground and bring the debt into default. At this time, the foreign investors exchange some debt for equity, the local currency falls in order to lower the price of local production abroad, and the economy re-stabilizes with minority ownership by the cronies, or their complete removal. The alternative is to let the debt default, and have an end to foreign (and domestic) investment, freezing the country in place.

What Rubin did in his "strong arming" tactics was actually a positive. It prevented the Asian crisis from becoming worse. It allowed the exchange of debt with equity and allowed changed ownership from failed local cronies to more successful locals or successful foreigners. It prevented the economies from total collapse of incoming investment flows. This was achieved in places like Korea, but not in Indonesia, where capital investment froze because debts were not converted into equity and control remained within the broad crony network. Thus recovery of loans was prevented, and foreign investors fled, with no intention of ever returning.

The dollar reserves of the Asian countries, even those who have become net creditors, do not allow them complete repayment because the loans, at 12-20% interest, are owed by companies that are still distressed, not the ones that are accumulating dollars at a 5-6% return. Thus the only choice for the debtors is repay debt or lose control by partial or complete sale to local companies with cash or to foreign firms. Thus the reserves are only good when the owners of the indebted corporations are willing to sell them in part or in whole. Which they very much don't.

This happened in Japan too. Everyone there was over-invested, and returns neared 0 because all export business opportunities were filled, while government could not remove the buffer that provided the last bit of profit for corporations by opening consumer markets to competition for fear of pushing the rest of industry and the banks into bankruptcy. They also need to keep the Yen weak enough to allow continued export of the product of their "excess" capacity, and prevent consumers from buying foreign goods so that ownership of industry and banking does not change hands from LDP cronies to others, as it would if local consumers were not fleeced by producers on the one hand, and their labor expropriated by an artificially low yen value.

The result of this kind of policy is to cause consumers to save more than they otherwise would because of the high prices, and for these savings to seek a way out of the country where returns are more than "slightly above zero". Thus Japanese save at astonishing rates, and the savings constantly leave the country. This condition is also apparent in China where government subsidies of exports have caused over pricing of products locally, thus driving up the savings and causing their export abroad.

So to the final question, releasing reserves would not crash the currency, it would crash the distressed companies and bring the crony owners to a loss of ownership while endangering future foreign investment if the governments do not allow the bankruptcy liquidation to proceed.

In this case, across Asia, the choices are (1) continue the misery and retain control by failed local cronies at th ecost of 20% interest rates and holding matching reserves earning 6%, (2) liquidate the failed cronies and change the balance of power in the society, or (3) face the possibility of ending foreign investment till a new regime comes along, a far worse misery.

Blackblade: I have copied and posted the key sections of your post #64900 below as this hits on the head a part of the 'agenda' pertaining to gold that is being effected at present.

Like Bush and Blair keep saying about Afghanistan, it is not something that can be achieved overnight - because there are too many inter-related considerations. ( Isn't there something about - turn up the heat of the water in the pot slowly and the frog doesn't jump out?) A rather loose analogy, but enough to get the point over.

<<<...............I saw much of this first hand and it does not surprise me that we could see many of these companies cease to exist in the not too distant future.................

). Many of these companies are backed into a corner and the only avenue left is to merge and acquire other miners on the cheap to satisfy old forward positions or to engage in new forward sales. As prices fall, there is little incentive to lock in to very low forward prices. Then the "House of Cards" falls in on itself. There is very little if any new exploration activity - this will eventually result in reduced supply and higher prices. - "Game Over" >>>>>>

Now, all those interested, go back to my post #64733 in which I included a run down on a certain 'illiustrious' family name in banking, and note in particular the closing paragraphs.

One point on which, from the many posts here, we are all agreed is that Gold is the only 'real' money. Apart from that it is a fairly finite commodity in its own right with singular qualities.

Can you now begin to get some idea of the grip on the world those that own and control most of it will (do) have. Yes, it could be (made to) sink a bit lower before any substantial rise, and, in my book, probably will.

I mean, why pay $270, if you can shake it out at $250. Then you have the objective to push some of these mines into 'surrender' that try to hang on in there, and a lower gold price will do just that. Many of them are hanging on by the skin of their teeth at the moment and if the price doesn't go higher, will be 'out' next year.

I used to struggle with understanding the clich� - 'the truth shall set you free'. It sounded very philosophic, but I kept saying to myself - 'free from what?'

Then, one day it dawned - 'Free from false illusions' (about what makes this world tick, and who winds the clock).

"He who has the gold makes the rules" Never, never, forget that ('They' don't)

In the following story, we get another example, as to how, ordinarry citizens are considered by the collectivity.

The discussion is about the following :
The NBB is about to loose its exclusive printing/distribution, right, of fiat, within the community, due to the euro and shift of this emission-right to the ECB ! When the NBB looses this right, to the ECB, it has to distribute its reservefund, to the shareholders. Say 2.717 euro per share. Present value of NBB on Brussels exchange = 1.600 euro !
Minority, plublic shareholders are calling Deminor, to take up their defense. But the NBB governor (Guy Quaden) has already stated that ECB + national banks, will share the responsability and exclusive right for the euro-fiat-emissions ! And that's it. Forget, again, about honest national or central banks, towards the shrimps.

NEW YORK - Bond-timing letters made a dramatic move to the bullish side--their average exposure as tracked by Hulbert Financial Digest went from -38% Sept. 27 to a recent + 60%. Problem: Such extreme moves are usually wrong.

So, it makes sense to listen to some dissenters. Skeptics have been pondering the Treasury's killing of the 30-year bond. Their reactions are classic newsletter: (1) deriding official explanations and (2) conspiracy spotting.

Richard Russell in his Dow Theory Letters: "Greenspan literally sponsored the Great Bubble by feeding it all the ammunition it needed.... When the bubble burst he first misdiagnosed the danger, and when the danger became apparent he opened the floodgates, creating an ocean of money.... But the long bond wouldn't come down.... Bond buyers were (rightly or wrongly) afraid of future inflation.... What to do? Why that's easy--get rid of the rotten long bond.

"The way they ended the long bond was sort of disgusting. They didn't wait for the close, just announced it and drove the shorts to the wall. I heard that some Wall Street houses got the info early and made a killing.

"It's long been rumored that gold has been manipulated in order to hide the forces of inflation. I've been skeptical of that so-called manipulation, and I still am. But with the elimination of the long bond, I fear that evil has overtaken the authorities who run our nation."

Tony Sagami of Scientific Investing (no Web site--ironically!):

"A blatant attempt to manipulate the bond market.... The Treasury Department desperately wants to prop up the only part of the economy that hasn't totally fallen apart: the real estate market."

Harry Schultz of the International Harry Schultz Letter, writing in his trademark telegraphese:

"The US govt shot another dog, to stop it barking. Not satisfied with shooting the golden dog so it can't bark/warn of govt overspending & currency debasement, the US now blocked the messages from its 30-year bond, long a benchmark for economists. Wall Street has become a brothel."

These skeptics think interest rates have bottomed and will probably head up.

Since the euro/USD rate is subject to the policy decisions of both governments and central banks in the EMU, Japan, and the US, I would have to predict what they will do in order to predict these rates, as well as predicting whether any further "all paper will burn" kinds of attacks are coming. What remains outside their powers (at least for now), namely the relative debt positions for the two currencies that make up much of what dictates the exchange rate, and investment flows that go from the regulated system to the less regulated one, means that till the EU moves tax/reg costs downwards and/or the US moves them upwards, flows would continue at the present pattern and join with negative EMU investment income balance to cause a continued drop in euro/USD, now being maintained by an artificial carry trade between artificially low USD rates and artificially high euro rates.

The liquidation of USD debt in EMU is proceeding slowly, and eating away at the reserves. Meanwhile, the euro debt inflation of 98-00 may be released into the pricing system by defaults of euro debt if the ECB maintains rates this high much longer without tax and regulatory lightening by the EU.

The thing to remember when thinking of tax and regulatory costs is that the product provided by government in return for taxes is near 0 in value and because it eats up resources that could have been used by individuals taxes are a double negative, as are regulations - which lower efficiencies while slowing business reaction times.

So if tax and regulatory burdens are say 50%, then the appropriate carrying capacity of financial assets in that jurisdiction would be 1/4 of the carrying capacity of a jurisdiction with none. That is because return after government burdens is diminished by 50% on the tax (including price inflation) and government borrowing side and by 50% again when the government consumes resources. Leaving a 25% net return on the same investment.

Thus when US gov tax and spend policies went from accounting for 23% of GDP in the early 60s to 32% in the early 1980s, the value of financial assets relative to GDP fell from 2.6 to 2.0. But with 20% capital gains taxes and partial sheltering of investment gains in tax sheltered retirement accounts, the result is an effective investment tax rate of near 20%, and a value of financial assets at 3.8 times GDP.

In the case of the ECB, if it sticks to broad targets of 4% monetary and financial asset growth while taxes and regulation are lowered, the result would be a large scale import of capital in direct investment, which denies Europeans ownership of the new enterprises. If the EU substantially increases government burdens, then the maintenance of 4% growth in monetary or financial assets would cause a major price inflation and a continued evacuation of European capital abroad.

Thus I can't really say what is going to happen to exchange rates if EU tax and regulatory policy changes. If things remain as they are, then the euro would have to drop down to below $0.80 in order to bring the trade balance in line with the negative income accounts after a $2.3 trillion increase in international bank lending to the EU since 1997, of which $1.6 trillion seems to have been one sided into EMU, with no counter-investment abroad, then the EMU needs to increase the trade surplus or decrease the net capital flight (say by decreasing taxes on investments down to below US levels) by $80 billion or so. Just keeping the euro rates up simply causes the carry trade on hot money to produce more euro into the world market supply.

The Debt supply demand would include net growth in dollar debt as supply at about $60 billion (so small because dollar debt is still contracting in Japan and developing nations), and interest due as demand. Interest due totals $430-480 billion with the EU debt repayment demand range.

The sums are not allways additive. The net supply demand balance means default when it is negative - dead debt. While it is cumulative on the debt creation side.

Though "theoretically" the overall balance should come out 0 once trade balances and investment balances are added in, it does not quite work that way because part of the investment balance is a result of demand for future dollar supply from US investments and is a result of a negative supply demand balance. Similarly, when the supply demand balance is positive, the net outflow from US assets in the investment flows accounts is part of the phenomenon resulting from reduced dollar demand. When analyzing this balance for the purpose of determining pushing and pulling on exchange rates, then I calculate it both with and without the investment figures from the equation. The core figure, however, is the debt supply demand balance.

As to your question as to what reverses these conditions of strength, it would be a revival of dollar debt funded developing market investments, particularly from abroad.

Thus, a sudden renewed boom in foreign dollar debt funded investment in the Tigers and China would completely whack the dollar if a US slow down does not help in reducing the trade deficit quickly.

Frankfurt, Nov. 8 (Bloomberg) -- The European Central Bank and the Bank of
England cut their benchmark interest rates by a half point each in a bid to
prevent a shrinking U.S. economy from dragging Europe into recession.

The ECB lowered its rate to 3.25 percent, the fourth reduction this year and only
the fifth since the bank took control of rates for the countries that share the euro
in 1999. The U.K. central bank pared its rate to 4 percent.

The U.S. economy, destination of 14 percent of Europe's exports, contracted last
quarter for the first time in eight years, and the Federal Reserve has cut 10 times
this year.

European policy makers should ``cut rates until they approach the U.S. levels,''
said Klaus Ridder, chief financial officer of Stinnes AG, a German company that
transports goods for manufacturers such as Royal Philips Electronics NV. ``Our
business worldwide was hit hard in September.''

The Fed trimmed rates by a half point on Tuesday to 2 percent, the lowest since
1961. The Bank of England has cut borrowing costs seven times this year, taking
rates to their lowest since February 1964.

ECB President Wim Duisenberg will have a press conference at 2:30 p.m.,
Frankfurt time.

Rising Unemployment

Yields on interest-rate futures contracts plunged, suggesting investors see more
reductions in coming months. The yield on the March Euribor contract fell 6
basis points to 2.75 percent. The U.K. contract due the same month yielded 3.63
percent, down 17 basis points.

Europe's economy is at ``a virtual standstill,'' the International Monetary Fund
said this week. The dozen nations that share the euro grew 0.1 percent in the
second quarter. Germany, the region's largest economy, didn't grow at all.

German unemployment had the biggest rise in almost three years in October and
business confidence posted the biggest drop in almost three decades. French
jobless lines grew for a fifth straight month in September.

British manufacturers were more pessimistic than at any time in more than three
years in October. Consumer spending -- 60 percent of gross domestic product --
has kept the economy expanding. Even so, home prices fell for the first time in a
year in October, Halifax Group Plc said.

European companies this year have said they plan more than 420,000 jobs cuts,
according to data compiled by Bloomberg News. That doesn't include 1,400
layoffs at Irish crystal maker Waterford Wedgwood and 13,000 jobs at risk at
Sabena SA after Belgium's state-owned airline declared bankruptcy Wednesday.

`Verge of Recession'

Airbus SAS on Monday pared its production forecast for 2002 by a quarter.
Usinor SA, Europe's No. 1 steelmaker, said it will reduce production by 10
percent in the second half of the year amid slowing demand.

``We've seen a lot of CVs from people who are looking for work,'' said Simon
Urquhart, managing director at Computalabel International Ltd., a software
company in Leicester, England. ``In the last four to six months, applications have
probably expanded 25 to 30 percent.''

The Dow Jones Europe Stoxx 50 Index is down 20 percent this year.

``The European economy is on the verge of a recession, if not already in it,'' said
Julian Callow, chief continental European economist at Credit Suisse First
Boston. ``Price data show a further decline in inflation.''

Slowing Inflation

The inflation rate in the 12 euro countries slowed for the fifth month in October, to
2.4 percent, compared with 2.5 percent in September. German inflation fell to 2
percent for the first time in a year, final numbers showed today.

Inflation has exceeded the ECB's 2 percent-limit for 17 months and the central
bank has cited rising prices as a reason for not lowering interest rates more
aggressively. Unlike the Fed, which also has a mandate to boost employment,
the ECB's chief aim is to combat inflation.

``There is no inflation danger,'' said Franco Mambretti, chief executive officer of
German machine tool maker Walter AG. A rate cut ``can only support investment
and consumption.''

Where I agree with FOA both now and in the past is that there is a political motivation for what FOA says. While in the past I thought this motivation was morally neutral, I found in the analysis of FOA and Another's later expressions that the mechanics of the program are composed of: (1) fraud by EU member CBs guaranteeing liquidity in the gold markets with no intention of following through. (2) an attempted involuntary erasure of dollar debts on the part of EMU governments, which pretty much amounts to intentional default, i.e. sheer theft. (3) What seems to be an intentional Japanese style artificial inflation of the value of the ECB member's gold stock by intentioal creation of a "gold bubble".

Particularly worrying was the net effect on Europe rather than the US: it was going to result in complete destruction of Europe's industry if it were carried out appropriately (i.e. maintaining some sort of par for the euro in terms of gold). If no redemption in gold and no par were set, then the "gold bubble" would destroy the euro because nobody would care how much gold the ECB had if the ECB were unwilling to sell any of it at a given price. It ends up being an accounting gimmick rather than a girder in a strong monetary system.

Upon understanding this, I figured that the financially weak party was the EU. Debt supply demand studies showed that the Fed was maintaining a rather tight supply demand balance for the dollar at home for most of Greenspan's tenure.

Further debt supply demand balance calculations revealed that it was during periods of credit expansion abroad - particularly in lending to developing markets by foreign banks - that the dollar supply demand balance was strongly positive and caused prices to rise in dollar terms and caused dollar exchange rates to fall. The US trade deficit seemed to grow not as a result of the US pushing dollars on an innocent and unsuspecting world, but as a reaction for the deflationary demand for dollars to repay debt formed in the the Eurodollar markets abroad, particularly in London.

A study of the Japanese financial flows and interest rate policy revealed the cause for the past 15 years of financial bubbles, from about 1985-6 onwards was Japan's attempt to cover up the devestating wave of bad investments made in export industries, during and after the real-estate and stock bubbles that hid the industrial malinvestment bubble of the early-mid 80s, the BOJ proceeded to create a 1987-89 bubble in the emerging nations, and then another one in the 1995-7 period of BOJ interest rates near 0. I realized that the BOJ was trying to keep the banking system afloat by putting non-Japanese assets on the other side of Japanese bank's liabilities. And that doing so meant that it was bombing the world with hot money at non-market interest rates of 0%.

Finally, when FOA started putting forward his economic theories, I realized that he had spent too much time listening to an Islamic cleric who had not a clue as to economics. The more he explained, the less reason there was to believe anything he said on economics, and better reason to doubt the competence of the assorted politicos making up the "political will". They started appearing to my mind's eye as a dozen little "sorcerer's apprentices" waiting to try out new spells they did not understand - but having convinced each other through posturing and victimization theory that they were right, were about to both set the house on fire while flooding the basement, leaving them nowhere to go for survival. At that point I posted my "warning".

Further suggestions of the supremacy of barter made me doubt the sanity of the "perfect logicians" of the central banking circles he refers too, and the standing of monetary history upside down in an attempt to justify the idea he implies: that investment does not and never did exist and all "paper" (which is the only way to do the bookeeping of investments) will burn because it is all fraud.

The "wealth barter gold" really took the cake. It was money in all but name, but if you called it by that name it would be because you were a "hard money socialist".

Finally, the total lack of causal mechanics within his never-never land of economic fallacy finally came to full expression with the assertion that "political will" would "trump" economic theory.

So, from my vantage point of budding economist, FOA's explanations come down to being non-arguments and economic gibberish that would even shame Marx and Keynes. From the political perspective, he reveals a monetary power struggle without moral or economic merit on any of the sides, the more responsible side seeming to be the US "dollar empire", so far as any economic reality is concerned, and the wild card is Japan. The Oil-Euro block scheme was thus revealed as simply an attempt to destroy the US and Asian economies on the one hand, and erase their own debts without calling themselves dead-beats. The motives of these people complaining of US defaults and monetary imperialism are simple: the greed for the unearned, envy grown of a zero sum view of social life that is characteristic of feudal societies such as Arabs still live in and Europe has barely made one step out of, and fear of their economic and financial future as a result of their stealing and wasting of their people's wealth.

Research firm Lipper Inc. says 93 percent of domestic mutual stock funds are in the red this year, providing further evidence that American investors are suffering their worst year in more than a decade. "I highly doubt there was any significant new money put to work in the past month or so," says Solin. "You still have a lot of people long tech stocks for instance, but not averaging down. The market has a wonderful ability to crush as many people as it can."

Indeed, there is little evidence that equity fund outflows have subsided, even during the rebound from the Sept. 11 terrorist attacks. "Investors have pulled money from stock funds during nine of the past 10 weeks," says Tim Villano of Aquila Advisors Inc., also in Connecticut. That outflow of money is bound to increase this month as investors send money to bond funds that have soared after the U.S. Treasury's decision to scrap new issues of the 30-year government bond.

The CBOE Volatility Index this week dropped below 30 for the first time since Sept. 5, suggesting that investors are on pain killers, accepting rising stock prices with goofy grins and drooping eyelids. "One sure sign we're still in a bubble is that every rally is into the pure crap," says Cliff Asness of AQR Capital in New York City. "People are still looking for lottery tickets, not investments. That's scary."

Black Blade: There's no argument here as it is true. There's no real news to trade on expect giddy expectations by some that we have seen the "Bottom" Bad news comes to light daily and yet the markets rally. Perhaps there is some speculation in the market indices and the markets by the president's Working Group on Financial Markets. This certainly would not be unprecedented. "Interesting Times"

WASHINGTON (Reuters) - Fewer Americans applied for first-time unemployment benefits last week, but the number of workers remaining jobless hit its highest level in more than 18 years, the government said on Thursday in a report showing weak labor conditions in a struggling economy.

The number of initial jobless claims fell by 46,000 to a seasonally adjusted 450,000 for the week ended Nov. 3, the Labor Department said. However, the number of workers staying on jobless benefits reached its highest level since April 23, 1983, when the economy was struggling out of recession. These so-called continued jobless claims rose by 34,000 to 3.72 million for the week ended Oct. 27, the most recent week for which the data were available, the department said. ``Folks who have lost their jobs are having a great difficulty finding new jobs. That's something we haven't seen since the last recession,'' said Mark Vitner, senior economist with Wachovia Securities in Charlotte, N.C.

``Many of the layoffs that we've been reading in the papers lately haven't even taken effect,'' he said.

Black Blade: The "Bone Pile" continues to grow higher. Just fewer applied for new benefits is all. The outlook still looks "GRIM."

Thanks for discussion as you have fulfilled my hopes of drawing that out. I have taken in all sides of opinion for the last 30 months. Speaking as an investor and US citizen, I see very, very little opportunity for capital gains outside of investing in gold AT THIS POINT IN THE CYCLE all things considered. Many thanks.....CM

The main core problem post the 1986 reforms in the US tax system are a product of Japanese attempts at rescuing their political power structure, which revolves around the banks and the bum industrial companies they lent to without rhyme or reason at artificially low interest rates, and to their real-estate subsidiaries. They lend in dollars at near 0% and issue Yen exchange rate hedging instruments at unreal prices in order to back their yen liabilities. The dollars inflate foreign economies as they are invested outside Japan.

They inflated SE Asia in the 87-89 period, and again in 1995-7, then inflated Europe and inflated us along with China.

Contrary to FOA's claim that the euro is at the onset of a new "currency timeline" it is nothing but the successor to a group of prior currencies with enormous historical inflations built into them which were issued by heavily indebted governments that are seeking to increase their indebtedness and the rate of their deficit spending. The debts accumulated by the separate precursor currencies did not change as a result of the creation of the euro, they just got a new name.

In other words, the euro is as much a problem as the dollar. It is not a new animal but an old tired one with lots of baggage.

http://www.mises.com/fullstory.asp?control=820&FS=Operation+Enduring+Inflation�Who pays and how? The first is easy to answer: you and I. The government spends no money that it does not take from the pockets of the people. Whether government is sending welfare to bums, paying off big businesses, or dropping bombs in strange lands, we are the only source of its spending. This is because government produces nothing on its own; even if you love the things government does, it is impossible to deny that it is a parasite on society�
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�The more interesting and complicated question is: where is the government going to get the money? ...
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�Now we move to the most likely scenario of all, the tried and true way in which government funds itself: inflation. I know that talking about inflation now is like warning of a bad winter in the middle of a hot summer. With the price of oil falling and interest rates being forced lower and lower, no one seems to think that there is any danger that general price increase will get out of hand�

I agree that the world's economy perpetuates itself in a quagmire of increasing debt. The debt itself does nothing to hamper GDP except that interest payments hamper the bottom line profits. GDP is the positive production side of goods and services. An increase in GDP is healthy for all economies.

The problem with debt is that there is a corresponding cost associated with servicing and maintaining a given debt level. If a corporation could borrow an unlimited amount of money without increasing its cost of capital, all corporations would borrow to the lenders limits all of the capital that they could.

If you look at capitalism throughout history, capital is a scarce resource. There is never enough capital for expansion and incremental capital, if invested wisely, provides for additional production of goods and services. As interest rates increase, there is a corresponding rise in the external cost of capital (capital raised from borrowing or bond issuance, not equities) and a need to offset these liabilities with a higher rise in the rate of return resulting from the borrowed capital. Opportunity capital is the judgment of which endeavor in which to invest borrowed funds to maximize return. Therefore, it is not the debt that is significant to the private sector but the costs associated with the debt. Same with the public sector.

As with the private sector, the public sector also has an underlying cost for debt incurred. Your point about "*Increasing Total Debt, strangulates, declining total GDP*." has no relevance without the corresponding underlying cost associated with the debt incurred. Declining interest rates in the future will have a less dramatic effect on the liabilities side of their financial statements and vice versa.

The Fed has been financing the U.S. national debt service with the lower interest short term bonds since the early days of the clintonians. The lowering of interest rates by the Fed is for the ultimate benefit of the banksters but all holders of variable interest debt such as governments are also beneficieries. In the private sector advertisements concerning second mortgages on citizen's homes in order to lower credit card interest obligations has showed a 50 basis point decrease in Fed funds and a 12.5 basis point decrease in the rates charged by the blood suckers, thereby increasing their spread by the 37.5 basis points which is not passed on to the borrower. Similarly in the public sector, the benefits are not passed on to the taxpayers.

Therefore, the meaning of statistics-- To say that we need to decrease debt in the public sector says that the governments of all countries spend within their revenue inflows that they receive. We all know that Keynes buried that theory along with the responsibility of the politicians who implemented deficit spending and implemented vote buying.

So Belgian, no statistics, no meaning. If the ratio of GDP to debt interest payments is not relevant, then what is? If GDP growth doubles and debt service remains constant, then the public sector is way ahead in the short term. To say that all the debt that is being accumulated by all of the bureaucracies in all of the countries in the world is unhealthy, then I agree. But the only real meaning that it has is, if Belgium's GDP/Debt interest ratio is twice that of the rest of the world, then that is significant to the citizens of Belgium. And those statistics provide the information to those that are interested in doing something about it. Unfortunately, the usual solution in the public sector is to offload their irresponsibile increased debt spending on the taxpayer.

the Saudi unrest situationIf it weren't for the wealth situation of the royals here one could almost feel sorry for their situation. Much of the population is quite anti-US, of course, and the royals would have a most ambiguous private attitude as well. The Saudi Arabia could be looked upon as an occupied country and one that is maintained solely by US (oil) interests. However, probably the more accurate way of looking at their situation is of a protectorate/puppet state. The royals would be dethrowned by their own Islamic fundamentalist population were it not for the presence of US military nearby.

So, gold is not going to rise anytime soon? The Euro is not a replacement currency for a dollar on its final legs, because it isn't on its final legs? The use of the dollar as a reserve currency in the purchase of oil (and gold) will not occur?

Where do we stand, man? Is there hope and why all the domestic attacks then if not knock us down a notch?

Also, isn't it too fraud for the Fed and Treasury to trade or cause to trade or to facililitate trade in a commodity for the sole purpose of containing its price due to a loss of control causing a much vaster problem, all while denying and/or causing to be denied that gold isn't relevant in internation financial circles?

What are our options as a country with our money and our future best course of action to maintain the status quo but allow other countries to have what we have too?

The actual timing of my turnaround as to the likelyhood of the euro taking a reserve role of some substance was during the ECB's rate hikes in 2000. That is when I realized that the ECB was not willing to inflate enough to create a debt trap, or that the debt trap on foreigners was not what formed as a result of low ECB rates.

My first supposition was that the ECB's inflation of the euro money supply was simply too small and too slow, but a short study of the ECB's "achievements" on this end came up with the simple observation that the only substantial lenders in euro were banks, meaning that normal people with their heads screwed right did not want euro denominated paper, thus the ECB's monetary inflation was concentrated solely at the monetary base level - i.e. the purest of inflations, associated mostly with bail-out activity rather than economically justified lending.

Soon after I posted that the ECB is not doing anything that would bring it to where it wants to go. I said that it is "chicken". That it is unwilling to do what is necessary to form a strong fiat debt currency: a global debt trap. A debt trap requires two stages, a massive inflation followed by a monetary contraction. I then said that the ECB was afraid of its own shadow and was unwilling to suffer the consequences of the actions that would lead it to its goal.

Then I realized that if the ECB did inflate at a rate at which the "debt trap" goal would be reached, the euro would be a laughing stock as waves of it would flood the market.

Then I looked at the composition of bank and bond lending in the global debt markets after the initial euro debt expansion of 1999 and found that the dollar was not displaced proportionately in the floating value global debt markets but for purchases of euro denominated bonds by EMU banks. Meaning that euro bond issues did not have a strong market. Only EMU banks and insurance companies were willing to hold large amounts of euro denominated paper. And that was so because they were part of the euro system itself.

Later, I found out that there was an enormous bank led move into euro assets funded by borrowing in other currencies, predominantly yen and international dollars, and that the EMU already had a negative income flow as a result. It's preliminary success in attracting investment before the euro launch (e.g. $1 trillion in 1997-8 alone) caused a crowded trade.

The question then arose if they knew what they were doing. I came to the conclusion that they did not. Henceforward I called Wim Duesenburg "Dim Wim".

That is absolutely fascinating cause and effect.Thanks so much for your thoughts on this.Always seems in these situations that at the core there is some entrenched power trying to manage solutions to their advantage.The long term ramifications of such tinkering are truly mind-boggling.

I'm not too bright but I have this nagging, fundamental misgiving about US monetary and fiscal policy. I feel the same way about all of the debt in this country held by consumers, businesses and, not least of all, government. I am also awestruck by the enormous trade deficit this country runs (good for US!). I see no reason for the rally in equities at this moment nor the USD. My friend, the world is upside down and something is definitely not Kosher. What I am looking for are plausible explanations for the surreal. Will I find them?

$4.00 and the very rich get richer.i agree with pandagold she has been the more accurate in the assessments on gold the the usa.
alot of talk here but why are people not the money buying ,if au and ag is so cheap. silver supply down to months and we are close to $4.00.fundamentals are fine but if you do not have the $$$of the rothschilds then stick to tech analysis,you will have more sustaining power.t.a. wins EVERYTIME.most people do not understand t.a.so they kick it around.
three ,four years ago the fundamentalists where out in full force touting gold and silver .here we are ,prices are lower, most of those people are long gone and we will be next if we are not careful.

The dollar is high because people in the world still think it is as good as gold. That perception will change.
Gold will go up when inflation comes. Inflation is coming. It is either that or US bankruptsy. Which do you think they will choose? They may have to write us all a check for thousands, but they will do that before they let the US go under.
Bankers are in big trouble. Relax and enjoy the fact that they are sweating bad right now.
I bask in the yellow glow. I enjoy watching them try to figure out how to make my investments worth more.

However, I cannot not get excited about dollar's future due to the existence of dollar demand of foreign debt, because the debt seems to be unsustainable (i.e. rate of growth of debt [interest rates] is greater than the rate of growth of the real economy). The quality of the debt is the problem.

Hyman Minsky has fashioned the following taxonomy of debt:

1. "Hedge finance", where a firm borrows against a relatively assured cash flow;
2. "Speculative finance", that is not covered by visible receipts and where a firm has to rely on renewing old debts;
3. "Ponzi finance", where there is no cash flow and debt has to expand exponentially to avoid bankruptcy.

Most of the emerging markets' debt is either speculative or Ponzi type. Global recession would make things worse. During the Kondratieff winter, debt defaults are the norm. In such an environment, demand due to debt could evaporate�

I have contended that there is an undeclared gold standard of sorts, tied with gold and perhaps other commodities like oil. That the Fed has attempted to maintain a par of the dollar to the gold and whatever other items might be in the basket.

If this were declared, say that one dollar is a basket of 2 grams of silver, 1/100 gram of gold, 1 oz of crude oil, a briquette of coal and 1/200 of a gram of Palladium, then the expected result of successful maintenance of par would be that the basket would remain at the constant price of one dollar.

If it were a pure gold standard, then the Fed's job would be to maintain the price of gold at a constant level. If it were a golden treasury standard, i.e. that the Treasury's bonds be exchangeable for a fixed amount of gold upon maturity, then the Fed's job would be to maintain this price by adjusting the treasury price through its monetary operations.

Under any of these circumstances would one dare raise the question of manipulation?

Is the definition of a dollar as the equivalent of a particular basket of goods or through the pegging of treasuries to a basket of goods a manipulation?

I would say that if the pegging were accomplished by artificial supply of the commodities themselves or with an artificial supply of futures and options then one could argue there is a manipulation. If it is solely accomplished by free market actors doing whatever they did in their own private dealings, and the Fed simply adjusted rates and monetary base, then what harm is there?

this was taken from a stockhouse forum comment,pretty well sums it up right?more reason to buy gold and silver because this war is going to become ugly.

"Same Old Names, Faces Primed to Make Big Bucks Off Tragedy

Bush's "crusade" against the Taliban of Afghan istan has more to do with control of the immense oil and gas resources of the
Caspian Basin than it does with "rooting out terrorism."

Once again an American president from the Bush family is leading Americans down an oil-rich Mid dle Eastern warpath against
"enemies of freedom and democracy."

President George W. Bush, whose family is well connected to oil and energy companies, has called for an international
crusade against Islamic terrorists, who he says hate Americans simply because they are "the brightest beacon of freedom"
and a democracy.
The focus on religion-based terrorism serves to conceal important aspects of the Central Asian conflict. President Bush's noble
rhetoric about fighting for justice and democracy is masking a less noble struggle for control of an estimated $5 trillion of oil
and gas resources from the Caspian Basin.

One of the material results of the elder Bush's Desert Storm campaign in 1991 was to secure access to the huge Rumaila oil
field of southern Iraq, which was accomplished by expanding the boundaries of Kuwait after the war. This allowed Kuwait, a
former British protectorate where American and British oil companies are heavily invested, to double its prewar oil output.

The Trepca mine complex in Kosovo, one of the richest mines in Europe, was seized last year by front companies for George
Soros and Bernard Kouchner, two members of the New World Order gang who devastated Serbia.

A similar geopolitical strategy, influenced by Zionist planners, to control the valuable mineral resources of the Caspian Basin
underlies the planned aggression against Afghanistan, a Central Asian nation that occupies a strategic position sandwiched
between the Middle East, Central Asia and the Indian subcontinent.

The former Soviet republics of Uzbekistan and Turkmenistan are the two major gas producers in Central Asia.

Today, the only existing export routes from the area lead through Russia. Investors in Caspian oil and gas are interested in
building alternative pipelines to Turkey and Europe, and especially to the rapidly growing Asian markets.

India, Iran, Russia and Israel are working on a plan to supply oil and gas to south and southeast Asia through India but
instability in Afghanistan is posing a great threat to this effort.

Afghanistan lies squarely between Turkmenistan, home to the world's third-largest natural gas reserves, and the lucrative
markets of the Indian subcontinent, China and Japan. A memorandum of understanding has been signed to build a 900-mile
natural gas pipeline from Turkmenistan to Pakistan via Afghanistan, but the ongoing civil war and absence of a stable
government in Afghanistan have delayed the project.

Afghanistan was at the center of the so-called "Great Game" in the 19th century when Imperial Russia and the British Empire
in India vied for influence. Today, its geographical position as a potential route for oil and natural gas pipelines makes
Afghanistan extremely important to energy magnates seeking control of these precious resources.

Enron, a Texas-based gas and energy company, to gether with Amoco, British Petroleum, Chevron, Exxon, Mobil
and Unocal are all engaged in a multi-billion dollar frenzy to extract the reserves of Azerbaijan, Kazakh stan, and
Turkmenistan, the three newly independent Soviet republics that border on the Caspian Sea.

On behalf of the oil companies, an array of former cabinet members from the elder Bush administration have been
actively involved in negotiations with the former Soviet republics. The dealmakers include James Baker, Brent
Scowcroft, John Sununu and, notably, Dick Cheney, now vice president.

Turkmenistan and Azerbaijan are also closely allied with Israeli commercial interests and Israeli military intelligence.

In Turkmenistan, a "former" Israeli intelligence agent, Yosef A. Maiman, president of Merhav Group of Israel, is the official
negotiator and policy maker responsible for developing the energy resources of Turkmen istan.

"This is the Great Game all over," Maiman told The Wall Street Journal about his role in furthering the "geopolitical goals of
both the U.S. and Israel" in Central Asia.

"We are doing what U.S. and Israeli policy could not achieve-controlling the transport route is controlling the product," he said.

"Those who control the oil routes out of Central Asia will impact all future direction and quantities of flow and the
distribution of revenues from new production," said energy expert James Dorian in Oil & Gas Journal on Sept.10.

Foreign business in Turkmenistan is dominated by Maiman's Merhav Group, according to The Washington Report on Middle
East Affairs (WRMEA).

Maiman, who was made a citizen of Turkmenistan by presidential decree, serves as Turkmenistan's "official negotiator" for its
gas pipeline, special ambassador, and "right-hand man" for the "authoritarian" President Saparmurad Atayevich Niyazov, a
former Politburo member of the Central Committee of the Communist Party of the Soviet Union.

The Merhav Group of Israel officially represents the Turkmen government and has brokered all of the energy projects in
Turkmenistan, contracts worth many billions of dollars.

Merhav has been contracted to modernize existing natural gas infrastructure and will build new facilities in an oil refinery in the
city of Turkmenbashi on the Caspian Sea. Merhav refuses to disclose its sources of financing.

In keeping with Israeli political interests, Maiman's planned pipelines bypass Iran and Russia. Maiman has said that he would
have no objection to dealing with Iran, "when and if Israeli policy allows it."

Iran has accused the United States of trying to keep regional pipelines from passing through Iran. Creating a counterbalance to
Iran's regional influence was a cornerstone of the Clinton administration, which was concerned that Iran could gain too much
control over Caspian ex-ports.

"This is a common interest for the U.S. and Israel," said Dr. Nimrod Novik, vice president of Merhav. "The primary interest is to
prevent the development of Turkish strategic dependence on Iran, given the unique emerging strategic relationship between
Turkey and Israel."

Russia and Turkmenistan are in a battle to conquer the Turkish gas market, and the supplier that offers the best price will
emerge as the winner.

"This is a great race," Maiman says, "Whoever takes Turkey first wins. Whoever comes second will have lean years."

Although the United States needs Russian assistance in its campaign against Afghanistan, when AFP asked Alex Chorine of
Caspian Investor what kind of relationship existed between the Russian and Western/Israeli energy companies doing business
in the Caspian Basin, Chorine said, "They act as enemies."

One of Maiman's proposed pipelines would bring Turk menistan's gas and oil to Turkey via Azerbaijan and Georgia.

Maiman's Merhav Group is also involved in a $100 million project that would reduce the flow of water to Iraq by diverting water
from the Tigris and Euphrates rivers to southeastern Turkey.

Israeli officials boast of having "excellent relations" with Azerbaijan, where an Israeli company, Magal Secur ity Systems, has a
contract to provide security at Baku airport. Magal is one of several Israeli companies that will "turn Israel into a major player in
Azer baijan" by providing security for the 1,200 mile pipe line taking oil from the Caspian to the Turkish port of Ceyhan on the
Me diter ranean Sea.

Enron, the biggest contributor to the Bush campaign of 2000, conducted the feasibility study for a $2.5 billion
trans-Caspian gas pipeline, which is being built under a joint venture agreement signed in February 1999 be tween
Turkmenistan and two American companies, Bechtel and General Electric Capital Services.

Maiman acted as the intermediary between the Turkmenis and the U.S. firms, but won't discuss "his cut" or whether he will
receive a stake in the pipe line.

The Merhav Group has hired the Wash ington lobbying firm Cassidy & Asso ciates and spent several million dollars to "en
courage" U.S. officials to push for the trans-Caspian pipeline.

CRITICAL FOR WHOM?

During the Clinton administration, Secretary of Energy Bill Richardson and "special adviser to the president" Ri chard
Morningstar promoted the Baku-Ceyhan pipeline, calling it "critical to the economic survival of Turkmenistan."

The relationship between Israel, Tur key and the United States. is the major factor for the selection of the Baku-Ceyhan route,
which could be extended to bring oil directly to energy-deficient Israel.

Energy experts, however, question the wisdom and expense of this route. Com panies are under pressure from the United
States and Israel to invest in east-west pipelines, although most companies would pre fer cheaper north-south pipe lines
through Iranian territory, according to WRMEA.

The U.S. firm Unocal was leading a pipeline project to bring Turkmenistan's abundant natural gas through Afghan istan to the
growing markets of Pakistan and India,until the turmoil in Afghan istan led them to withdraw from the project in 1998.

The planned pipeline would carry gas from the Turkmen Dauletabad fields, among the world's largest, to Multan in Pa kistan,
with a planned extension to In dia. The line from Dauletabad through Afghanistan is planned to transport 15 billion cubic feet of
gas per year for 30 years. This pipeline is on hold until the political and military situations in Af ghan istan improve.

There is a second Unocal project to build a 1,030-mile oil pipeline called the Central Asian Oil Pipeline Project, which would
start at Chardzhou in Turkmen istan linking Rus sia's Siberian oil field pipelines to Pakistan's Arabian coast. This line could
transport 1 million barrels a day of oil from other areas of the former Soviet Union. It would run parallel to the gas line route
through Af ghanistan and branch off in Pakistan to the Indian Ocean terminal in Ras Malan.

Before the sun set on the apocalyptic day that New York's gleaming twin towers collapsed, the U.S. government had al ready
decided to blame the attack on Osama bin Laden, the Saudi-born guerrilla leader, and the Tali ban government of Afghanistan
which harbored him.

Although the U.S. government did not present evidence in support of its case against bin Laden, Secretary of State Colin
Powell said on Sept. 23, "I think in the near future, we will be able to put out a paper, a document, that will describe quite
clearly the evidence that we have linking him to this attack."

When it was reported that the Taliban might turn bin Laden over to face justice, the Bush administration said that surrendering
bin Laden would not prevent an American-led attack on Afghanistan.

An international plan to remove the fundamentalist Islamic Taliban from pow er has been a subject of international diplomatic
discussions for months and was reportedly raised by India during the Group of Eight summit in July in Genoa, Italy.

The Indian press reported in June that, "India and Iran will 'facilitate' U.S. and Russian plans for 'limited military action' against
the Taliban if the contemplated tough new economic sanctions don't bend Afghanistan's fundamentalist regime."

The invasion plans described in the Indian press in June may come to pass in October: "Tajikistan and Uzbekistan will lead the
ground attack with a strong military back up of the U.S. and Russia. Vital Taliban installations and military assets will be
targeted."

The economic reasons for the multi-national assault against the Taliban were explained: "Uzbekistan, Tajik is tan, Ka zakh
stan, and Turkmenistan are threatened by the Taliban that is aiming to control their vast oil, gas, and other re sources by
bringing Islamic fundamentalists into power."

Mike, while I'm writing this, I see gold selling off (silver more so). Once again, we see where the paper based trading has plenty of selling power and completely dominates the physical fundamental markets. How may postulated, even just a few years ago, that with the fed expanding the money supply by a year to date "one trillion"; that paper gold could not reflect this inflation? This only further confirms that this form of market "hedge" is failing to function for its owners

In order to push dollar holdings further, international players needed and purchased "paper financial hedges" to balance their risk. Within their total mix of derivative hedges were found "paper gold price hedges"; modern gold derivatives. The important thing to remember is that these positions are not and never will be used to demand physical gold. They are held to buffer financial and currency risk associated with holding any form of dollar based asset. To work these items don't need to really perform "dollar price movements" in the holders favor as much as they are present in the portfolio to act as insurance stickers.

For the first time in this portion of the dollar's timeline and our lifetimes, such an inflation is about to show its face!

Paper gold derivatives became a major force in allowing this last, end time, demand for dollars and subsequent surge in it's value. This is why Another said it would run way up, even while being inflated, before the end would come.

With the world dollar gold markets completely locked from rising and performing their portion of a hedge function for your portfolio,,,,,,, because, if they rose trillions would be lost by the writers,,,,,,, what asset based currency would you escape into?

They( Euroland) say: We understand that there will be an inflationary transition form this dollar world because we, ourselves, must absorb a certain portion of all the past created dollar inflation. A portion of pain we and the world must all bear in order to economically get pass this period. But, at least, we offer a position in the wealth of ages to reflect this financial loss as it is manifest in price inflation.

Me: So, it seems to me that as the equity markets inflate, the "big boys" gold paper hedges can no longer perform their true function as said "paper hedge". This is seen via a falling "paper gold" price in the face of such inflation. Thus it would seem that these "vehicles" must be abandoned if they no longer can function as designed.

A few questions for ORO: What do you think will happen when the long awaited physical only gold markets truly open? Do you think that this will or will not occur? Do you see a "paper only" market existing alongside them? Lastly, in A physical market only scenario, what price would you put on an ounce of bullion? .

The main thing seems to escape you guys, I am still here at a gold forum, and still advocating physical gold ownership. However, I do not say "all paper will burn", and I definitely don't send demented religious fanatics to crash into the paper trading house and burn it down.

Even if Greenie is operating a hidden gold standard or some cousin of it, it can only hold within some limits as to distortions in the structure of debt and economic cash flows. I believe the structure has been stretched thin with financial twists and turns and may never return to its intended form. The evidence before me shows that it was not predominantly the Fed that did it, because it was not the Fed that had 0% interest rates for half a decade. Nor was the US the one country where government threw resources into the sea more so than another.

The ponzi finance is most strongly present in Japan where trillions of yen sit in matresses, and yet trillions more sit in accounts that were lent overseas because no one in Japan would borrow because there was nowhere to invest the funds and turn a profit. The carry operators from Japanese yen to other assets are the most precarious, as are their creditors among Japanese institutions, and the issuers of the debt and equity thus purchased with leverage.

The bulk of this is dollar denominated and is being "restructured" as we speak. But the yen must adjust appropriately, it needs to fall in order to balance prices in Japan with global prices, but it must rise because of the debt demand on the global market - the fact that where there is a carry trade there would be a disproportionate supply of the high rate currency relative to the low rate currency must drive the low rate currency upwards unless more of it is printed to buy the high rate currency, or see it rise so high that the leveraged carry borrowers go bust along with the Japanese banks that lent to them. The overbuilt Japanese export industry would not be able to survive such an upward move in the yen, and its meager cash flows would turn negative, throwing its debt into default, and/or its workers into the streets.

US investors are not that heavily into the carry trades and are likely to suffer on an exposure basis. The dollar demand for repayment of weak debts has contracted through debt-equity swaps, default, and IMF assisted "restructuring", which shows a drop in non Japan Asian debt to 1/2 its peak level. Unfortunately, the Latin American debt has not worked out that well. Russian debt has been largely liquidated.

The time for fear for the dollar is not during this portion of the deflationary wave but when it reverses and international dollar borrowing resumes with a much reduced debt base. The Fed's work would have to be immediate and swift in order to avoid a suddenly positive and large supply demand balance while the Fed has the spigots wide open.

That is why I take gold.

The other issue is political insurance, the value of gold relative to financial assets (and thus dollars) also depends on the tax rate - both on the collection end and on the spending end - the only portion of the asset's returns investors care for are the net returns after taxes. If congress continues on its current binge, then de-facto taxes will have risen and the value of financial assets would drop relative to gold as actual returns fall, thus pushing more people out of investments and into tangible savings. Hopefully they will not go on another bender, but we can't assume so. and must protect ourselves from it with GOLD.

I have difficulty with some of the perceptions about CB generated "debt traps" but that is for another post.

I do agree with the pegging of the dollar by the Fed based upon a speech given by Greenspan several years ago, where he admitted that an unofficial Gold standard was one of the functions of the Fed. I have maintained that this mythical Gold standard price is around $275/oz. and if you look in constant dollars, the POG bounces back from the top of its volatility at $300/oz. back into this area. I am convinced that the Fed, in association and conspiracy, with CB's and BB's around the world have conspired to maintain this pegged price for their benefit. The IMF, World Bank, and BIS equally benefit from a non-rising Gold price.

I have also advocated that when Gold is priced in dollars, then that provides the incentive to inflate/deflate FIAT or buy/short sell Gold to maintain this standardized price. But if Gold was priced in a basket of world commodities similar to the way that the world's fiat is settled (exchange rates) by CB's, then Gold would become the standard, rather than the USD. There is already an index that is being used for this "basket of commodities" so the conversion would not be a difficult task. These basket of commodities reamin constant around the world, and the local currency is valued in its relative buying power. There is another basket that has been set up by JPMC, I think called their GSCI, which they maintain for investing in many commodities including Gold and Silver. They allocate their investments between about 5 or 6 different categories. If I recall when I last looked, over 60% of their total allocation now is in Energy with PM's getting less than 3%.

Randy and I kicked this around a while back. If interested for additional discussion, I will dig back into my previous posts on pricing the POG as a basket of commodities with references on how its currently being done with the world's currencies.

I think that if the Fed would begin thinking in these terms, the Euro will not be the replacement of the FRN, value based Gold will be. Of course, if Mr. Howe is correct in his assumptions (and I think that he is), then the Fed cannot change its ways�it's too late.

I'll try to put some time into reworking that piece. I have learned some since that time. Furthermore, there are a number of additional contingent issues as to the choices the Fed and other CBs end up making, as well as tax/reg policy.

The ultimate values need not be reached under all circumstances. Furthermore, leverage in the dollar arena turns out to be less than it appeared at the time. Furthermore, much of the gold paper outstanding at the time has either been netted or expired. After tax returns are to be considered rather than plain vanilla ones, and the 5% returns considered at the time were GAAP earnings, which I noted lately are misleading and lower than realizable earnings going forward.

Thus, for the reader of that post I should warn:
1. Tax policy issues will dictate the degree of aggregate reallocation from fiduciary to tangible assets.
2. There is a later post with more refined projections.
3. There is little the dollar suffers from which the euro does not.
4. If one takes the Dow gold ratio and looks for a repeat of the proportions of price moves both nominal and real one had better consider whether tax rates would rise as they did then, because that factor alone contributed at least 30% of the price move directly. And a much larger portion was moved from financial to tangible assets by this taxation shift than by the actual change in cash flows.
5. Furthermore, the EXCESS monetary inflation of the 60s and 70s was far greater in scale than anything since, and much of the old inflation had already been released into prices.
6. Another item of note on using the Dow gold ratio for guidance is that the 70s spike down in the ratio was the abberation and would NOT happen this time because gold has not been fixed in price by statute but by market action.
7. The profit/revenue relationship is not 20 as presented in that post, but more like 8.

The basics are still generally right but less of a kick would be obtained by a break of par in the gold market because there is less "paper" to replace.

As to the question of whether the market would actually break, depends on whether the Fed actually reflates fully or retains the current attitudes (essentially to let the bankrupt go bankrupt), and whether it gives us a fright upon the resurgence of global dollar borrowing by reacting too slowly. If the resurgence is split with the euro in borrowing volumes, then the problem for the dollar would be much smaller.

If a "gold bubble" scenario such as I suspect might still be in the works, then there is no practical limit to gold prices, but in this case I would flee europe and forego anything related to the euro, because the results would be much different from those FOA and his "political will" expect.

FOA's idea of a "free market gold price" is an artificial bubble created on purpose: in order to make the ECB's lossy books whole and to cover oil-land's beggary of misbegoten "non-Western" asset allocations with winfall profits from a completely artificial gold price. The bottom line is that it would be a simple "wealth transfer" mechanism of the kind we know as theft by market rigging - just that it would be in the opposite direction from the one we are familliar with.

Since FOA indicates that there seems to be a willingness to allow "legal tender" for gold in euro transactions, I don't see a reason for anyone to actually hold euro.

I probably missed something somewhere, but one other thought in reference to the Euro and inflation�

If the ECU is swapping Euro's for member countries fiat, then doesn't it make sense that since each local currency has imbedded inflation that the Euro will absorb, that the Euro will be inflation based fiat just like the dollar?

Galearis(64933) The 'Saudi Factor�. . . With 10% of the worlds oil production any disruption through Islamic fundamentalist activity would cause massive ripples through the financial infrastructure for sure.

Galearis, any comment on the Ag cycle forecasts from post #64908 last evening(& attached link). This goes against E Waves who I think have spent too long on 'Deep Space 9' with some of their market calls, I just don't think $3.50/$3.68 is possible given the physical supply situation. However $4.11'ish "fits" as does end 2001/early 2002 for the cycle.

The euro is not the start of something new, it is a continuation of something old. Old and distressed. With financially distressed socialist governments and decrepit ideas of how an economy works.

These govs. are already ignoring Dim Wim's exhortations to deregulate and scale back and instead are seeking to raise their deficit spending limits above 3% of GDP.

As to anyone who thinks a free gold market is possible when the CBs hold 40% of the gold, think again. What is then to prevent a government to try and rebalance the big hole in its books a-la IMF with a "gold bubble", issuing tonnes of cash for the purchase of bullion, thereby making the currency worthless and gold scarce? What would prevent them from dumping the gold when it is cheap and they need to raise actual resources after the "gold bubble" is pierced and the books don't balance anymore?

The only way out of manipulated gold markets is to have all the governments dump their gold on the market once and for all, and to write into their constitutions that they can not accumulate gold or silver, or any other monetary metal, nor regulate who has it and how they chose to trade it. If they retain a fiat money system, they would be prohibited in participating in the setting of gold prices. They can (should) allow its use as legal tender at market prices.

Can anyone see a possibility of gold being used as a "tool" for jolting the Japanese consumer into spending again.
"Jipangu" is providing access for Japanese investors to buy into Canadian gold companies while the currency and the market values are depressed.
Could the CB`s decide to get gold into the hands of the Japanese (4 dollar drop today)at a fair gold/yen price, then engineer a windfall gold price rise to 6 or 8 hundred dollars.
I am wondering if this windfall to the Japanese consumer Along with investor windfall through Jipangu would snap them out of their recession?
Could gold be used as a useful economic tool in a manner like this?
If I understand correctly the Japanese consumer has savings. Does anyone see where an "engineered" windfall could assist in getting their economy booming.
If so, how high a gold price, and how much gold would be needed to be "allocated" to the Japanese consumer to achieve this pleasant shock to get the world economy back on track?

http://www.washingtontimes.com/national/20011108-75776015.htmThe Pentagon is set to dispatch a fourth aircraft carrier battle group to waters near Afghanistan, and the ships could depart for the region as early as this weekend . . .
Cmdr. Jack Papp, spokesman for Navy air forces in the Pacific, declined to comment on the Stennis' early deployment. The Stennis has not yet received a deployment order, but Cmdr. Papp said planners have the "flexibility to respond to emerging operational requirements". . . "

------BEIJING may once again lend Hong Kong a helping hand in its current economic difficulties, this time by letting more of its US$200 billion foreign exchange reserves be managed in Hong Kong. This latest move will benefit Hong Kong's foreign currency, gold and bond markets, as well as fund managers and financial institutions here.

China is said to have the second-largest pool of foreign reserves in the world - after Japan - with over US$200 billion invested in bonds, gold and foreign currencies in markets around the world. It already uses Hong Kong fund managers and investment banks to trade some of these reserves.

'If the money is put in bonds, it will further develop and deepen the bond market. If it is traded in forex and gold markets in Hong Kong, it will help these markets.'-------

China does not act in a vacuum, and the position of gold within the new European currency structure must seen as part of the larger picture here. Is your portfolio prepared to benefit from a new international paradigm which is supportive of physical gold?

Back in '93 when poor ol' silver carved itself out its last most recent hole to crawl into, the fundamentals were bullish. It has been increasingly bullish with ever increasing demand shrinking ever decreasing supplies and the one conclusion I come to is that T.A. predictions of market behavior as opposed to fundamental supply demand economics seems to have parted ways. I think someone else stated that today, almost as if this was some sort of team sport cheer-lead prompt (smile).

I think for both gold and silver bugs (I'm a hybrid, [smile]) the one thing that I am sure about is that neither gold or silver will be set free until there is a change in the political/fiscal climate to foster it AND/OR we run out completely of both metals. Since there is twice as much gold out there than silver, silver will probably go first. Given that we are down to this point - where supply/demand fundamentals are ignored (papered over) - I cannot even say for sure (given Pd) that there will ever be a rational response in exchange value in the market environment. When we run out of silver, for example, will it even matter if they re-write the ways and means of its exchange? There is WAY less silver around now than during Buffett's grab... you see? Besides what is $3.60 in 2001 dollars with a 7 to 10% inflation rate over the last three years? At this point that whole scenario is academic when reality is positively surrealistic.

So I just don't bother with that end very much.
Bottom line: This may blow up (probably will) when they run out or there is a realistic perception of the supply realities. Or a REAL left field event intervenes.

Probably not before.

What I also think is that this IS the bottom - at around $4.12 and further declines of today in both gold and silver will imply collapse in the paper markets.

But 'they' know that too, yes? The T.A.'s will likely continue to be satisfied at least. (smile)

if this is all true ,buy gold and silver, this war is going on for along time and the end will not be that pretty.their are a 100 people or in this world who ware bent on getting control of the world(read that as money) or if they do not get it they will destroy it.(but not on purpose though),that is what i think.the internet provides us with alot of knowledge and i am wondering when the "powers"will take the internet away from us ,in the name of home land security?we are learning to much for their own good.

Intelligence Review.

`Wolfowitz Cabal' Is an Enemy Within U.S.

by Michele Steinberg

On Oct. 14, the London Observer published one of the now
familiar�and totally false�propaganda scare stories, entitled "Iraq
'Behind U.S. Anthrax Outbreaks.' " The story gave credence to the
ravings of "American hawks" who say there is "a growing mass of
evidence that [Iraqi President] Saddam Hussein was involved, possibly
indirectly, with the Sept. 11 suicide hijacks." If confirmed, said the
Observer, "the pressure now building ... for an attack [on Iraq] may be
irresistible." One of these "hawks," an unnamed U.S. "administration
official," told the Observer that British Prime Minister Tony Blair is a
"faithful ally" in the war against terrorism and that "if it means we are
embarking on the next Hundred Years' War, then that's what we are
doing" (emphasis added).

The "next Hundred Year's War"? Who are the U.S. maniacs who use
such language, and are they not as dangerous as Osama bin Laden's
jihad?

Here we will name the names of the fanatics in this anti-Iraq grouping
who have become known as the "Wolfowitz cabal," named after
Assistant Secretary of Defense Paul Wolfowitz. According to the New
York Times, which published a leak about their activities on Oct. 12,
this grouping wants an immediate war with Iraq, believing that the
targetting of Afghanistan, already an impoverished wasteland, falls far
short of the global war that they are hoping for. But Iraq is just another
stepping stone to turning the anti-terrorist "war" into a full-blown "Clash
of Civilizations," where the Islamic religion would become the "enemy
image" in a "new Cold War."

The "Clash of Civilizations" theory, developed by Harvard
professor-turned President Jimmy Carter's National Security Adviser
Zbigniew Brzezinski and his prot�g�s, including Harvard Prof. Samuel
Huntington, defined the Arab and Islamic world as an "arc of crisis"
from the Middle East to the Islamic countries of Central Asia in the
then-Soviet Union. Brzezinski wanted to use the "Islamic card" against
the Soviet Union, and in so doing, began the policy of promoting
Islamic fundamentalists against moderate and pro-Western Arab and
Islamic governments. After the end of the Cold War, the
Brzezinski/Huntington crowd updated their "arc of crisis," declaring that
the Islamic religion is the enemy, in a new war in which religions, rather
than political systems, inevitably battle each other. However, trained by
British and U.S. special intelligence services and the CIA, and armed
by Israeli military networks, the very terrorist drug-runners in the Islamic
world who were launched by Brzezinski and "adopted" by the
Iran-Contra networks run by Lt. Col. Oliver North, under the elder
George Bush's Executive Order 12333, have become the main
suspects in terrorist attacks against the United States.

A Network Throughout the Government

The adherents of the so-called "Wolfowitz cabal," pushing the
"Clash of Civilizations" theory, are nothing less than "an enemy
within" the United States, a network that cuts across the Defense
Department, the State Department, the White House, and the
National Security Council. This report is not a "good guys" versus
"bad guys" description of the Bush Administration; rather it is a
warning that this cabal is a close-knit rogue network that is
trying to hijack U.S. policy, and turn the current Afghanistan
mess into a global war. The cabal bears a dangerous
resemblance to the "secret parallel government" of North and
Gen. Richard Secord's "Project Democracy" operation that ran
Iran-Contra. In fact, some of the cabal members now in the Bush
Administration are convicted criminals as a result of their activity
in North's "Enterprise"!

On Oct. 12, the New York Times revealed deep divisions in the
Bush Administration, describing how the cabal plots policy
behind the back of Cabinet officials, such as Secretary of State
Colin Powell, in the name of the U.S. government. The group
wants to obliterate Iraq, put Palestinian Authority President
Yasser Arafat and the Palestinian Authority on the terrorism list
(if not the obituary list), and declare war on nation-states.

The Times revealed that a key section of the "Wolfowitz cabal,"
is the 18-member Defense Policy Board, which met for more
than 19 hours on Sept. 19-20 to "make the case" against Saddam
Hussein. The meeting pushed for a renewed war against Iraq as
soon as the war against Afghanistan had concluded its initial
phase. It discussed overthrowing Saddam Hussein, partitioning
Iraq into mini-states led by U.S.-funded dissidents who would
steal the proceeds from the Basra oil revenues for their quisling
government. The meeting discussed how to manipulate
information so as to pin the Sept. 11 attacks on the United States
on Saddam Hussein.

According to the Times, Secretary of Defense Donald Rumsfeld
attended the meetings for only "part" of both days, and on Sept.
22, President George Bush rejected the Policy Board's
recommendation to declare war against Iraq. But to the
"Wolfowitz cabal," Bush's decision didn't really matter�senior
members of the Policy Board had been selected for their broad
international connections, especially to the United Kingdom and
Israel, allowing them to force changes in U.S. policy through an
"outside-inside" operation. If unable to change policy through
advising, the network could also run covert operations as a
"government within a government," as they had maneuvered
during Iran-Contra.

The chairman of the Defense Policy Board is Richard Perle, the
former Reagan Assistant Secretary of Defense for International
Security Affairs, now based at the neo-conservative American
Enterprise Institute.

Perle, nicknamed "The Prince of Darkness" because of his
nuclear Armageddon views during the Cold War, is, more
importantly, an asset of Conrad Black's Hollinger International,
Inc., which grew out of British Empire Security Coordinator
William Stephenson's efforts to secure arms for Britain during
World War II. At present, Hollinger owns the British Tory
Party-linked Telegraph PLC, whose International Advisory Board
is headed by former British Prime Minister, now Lady Margaret
Thatcher. Hollinger also owns the Jerusalem Post, another
war-mongering press outlet.

The "heavy hitters" on the Defense Policy Board are the worst of
the Anglo-American-Israeli geopolitical fanatics from the last
several decades, including: former Secretary of State Henry A.
Kissinger, who is also a member of Hollinger's International
Advisory Board; former House Speaker Newt Gingrich; former
Clinton Administration Director of Central Intelligence R. James
Woolsey; former Deputy Chairman of the Joint Chiefs of Staff
Adm. David E. Jeremiah; former Vice President Dan Quayle;
former Defense and Energy Secretary James R. Schlesinger; and
former President Carter's Defense Secretary Harold Brown.

Though Perle was only recently appointed to head the Defense
Policy Board, he and Wolfowitz have been collaborators for
more than two decades, as agents-of-influence of the right-wing
Israeli war faction. In 1985, when it was clear that Jonathan Jay
Pollard, an American convicted that year of spying for Israel,
could not have been working alone in stealing such high-level
U.S. secrets for Israel to sell to the Soviet Union, top-level
intelligence officials told EIR that an entire "X Committee" of
high-level U.S. officials, was being investigated. Wolfowitz and
Perle were on the list of "X Committee" suspects, and Israeli
spying against the United States was so thick that investigators
told EIR they had found "not moles, but entire molehills." Pollard
and his Israeli defenders later claimed that Pollard "had to" spy
against the United States because the Americans were soft on
Iraq and other Arab countries.

The "Wolfowitz cabal" is deterimined to push the United States
in the direction of the most dangerous Israeli right-wing policy,
including a possible Israeli nuclear attack on an Arab state. They
are implementers of the very "breakaway ally" scenario about
which 2004 Democratic Party Presidential pre-candidate Lyndon
LaRouche warned in his statement of Oct. 12 (see International).

Plan B: Wagging the Dog

The "Wolfowitz cabal" is out to destroy any potential for a
Middle East peace, and simultaneously is determined to crush
Eurasian economic development centered around cooperation
among Europe, Russia, and China. After being rebuffed after the
marathon Defense Policy Board meetings, the Wolfowitz cabal
set various operations in motion to plant propaganda stories,
falsify reports of U.S. policy, and carry out other maneuvers,
whereby the tail would "wag the dog." Unapproved statements
are made by cabal members, interviews misrepresenting U.S.
policy are planted around the globe, and intelligence reports are
altered or manufactured to further the policy goals.

The pattern is becoming crystal clear.

In the first such instance, shortly after the attacks of Sept. 11,
Wolfowitz declared that the United States will "end states
harboring terrorism," and insisted that under the principle of
self-defense, the United States could act alone, without the
United Nations, or cooperation from any other country. He
wanted to establish the "doctrine" that the United States would
hit a country "anywhere, anytime" based on secret evidence.
But, Wolfowitz was forced to retract his statements, in a visible
rift with the White House. Some days later, NATO allies at its
Brussels headquarters snubbed Wolfowitz, and refused to
formalize cooperation with the United States under NATO
agreements at a meeting where Wolfowitz represented the Bush
Administration.

In the same vein, on Oct. 7, the day the Afghanistan bombings
began, the cabal again attempted to provoke a rift between the
United States and members of the UN Security Council,
especially Russia and China, by altering the text of a letter from
U.S. Ambassador to the UN John D. Negroponte. (Not
coincidentally, Negroponte was a notorious insider in the
Iran-Contra operation, who was accused of collaborating with
narcotics-linked military death squads in Honduras in the 1980s.)
The changes in the letter were made without notifying
Negroponte's boss, Secretary of State Powell.

In the letter, Negroponte echoed Wolfowitz's so-called gaffe,
writing, "We may find that our self-defense requires further
action with respect to other organizations and states" (emphasis
added). The statement implicitly targetted Iraq, Syria, and
Sudan, all countries which are on the State Department's list of
countries that support terrorism. The statement violated promises
the United States had made, that it would limit "coalition" action
to redressing the attack of Sept. 11. Upon learning of the
statement, from the press, Powell reportedly "hit the roof." The
insertion was drafted by Stephen J. Hadley, who is the Deputy
Adviser to the National Security Council. The stunt may have
been planned at the Defense Policy Board meetings.

Then there's the case of former CIA director R. James Woolsey,
whose defined role is as the Policy Board member who is most
public in demanding the overthrow of Saddam Hussein. The
Knight-Ridder newspaper chain reported on Oct. 11, that
Woolsey had been authorized the prior month to fly to London
on a U.S. government plane, accompanied by Justice and
Defense Department officials, on a secret mission to gather
evidence linking Saddam Hussein to the Sept. 11 attack. In a
Sept. 18 press conference by Defense Week, Woolsey called for
creating a "no-fly and no-drive zone" in the north and south of
Iraq, so that the Kurds and the Shi'ites, respectively, could better
fight Saddam. "The watchword of the day," Woolsey said, is, "It's
the Regimes, Stupid!"

Since the Oct. 5 death from anthrax of Bob Stevens, the Sun
tabloid photo editor, from anthrax, Woolsey has been the world's
leading finger-pointer at Saddam as being behind the anthrax
attack. His so-called evidence is dated, prejudiced, and
completely unreliable.

It was no accident that Woolsey role-played a prominent
character�CIA Director�in the New York Council on Foreign
Relations 1999-2000 scenario the previous year, "The Next
Financial Crisis: Warning Signs, Damage Control, and Impact,"
that acted out a virtual coup d'�tat coming on the heels of a
combined financial crisis and terrorist attack. In the CFR
war-game, the U.S. President would be taken out of the picture,
leaving the country under the control of a crisis management
dictatorship.

Also dispatched to London to propagandize for a "rolling war"
that would attack Afghanistan, then Iraq, then country after
country until revenge is exacted, was fellow Policy Board
member Newt Gingrich. Talking to the London Times, owned by
top British-Israeli propagandist Rupert Murdoch, Gingrich said
that the United States is "at war" with "organized, systematic
extensions of terror, supported by nation-states." He said that
targetting the Afghan Taliban without defeating Iraq would be
"like defeating Imperial Japan and leaving the Nazis alone."
Gingrich threatened that countries judged not cooperative
against terrorism would face the consequences: "The U.S. and
the coalition forces will assist your own people in removing
you."

Setting the pace for his team, Perle was the joint initiator with
neo-con William Kristol of the Rupert Murdoch-funded Weekly
Standard, of an open letter to President Bush, that, while
ostensibly supporting the President in the war against terrorism,
was, in fact, an ultimatum to support a "Clash of Civilizations"
Thirty Years' War in the Middle East. Among the non-negotiable
demands set forth in that letter was the overthrow of Saddam
Hussein, "even if evidence does not link Iraq directly to the
[Sept. 11] attack."

There is no doubt that the Wolfowitz/Perle duo is at the heart of
the network that can use Israel in the "breakaway ally scenario."
Indeed, Wolfowitz is one of great hopes of right-wing extremists
in Israel, including among the radical settlers movement, who
are demanding the assassination of Arafat and the expulsion of
all Palestinians from the Occupied Territories (see coverage in
International). But, Wolfowitz and Perle are not "Israeli agents."
Rather, they are second-generation operatives both mentored by
the RAND Corp.'s Albert Wohlstetter, a former Trotskyite
communist turned nuclear strategist. Nor are the cabal
war-mongers Seven Days in May militarists.

A key member of the cabal is Richard Armitage, the number-two
man in the U.S. State Department, who was investigated in the
Iran-Contra scandal, and who is a longtime collaborator of
Wolfowitz in the targetting of Iraq. The cabal also has high-level
operatives at the National Security Council (NSC):

Gen. Wayne Downing, former Commander in Chief of the
Special Operations Command, was just appointed as Director of
Combatting Terrorism for the Homeland Defense Board, headed
by former Pennsylvania Gov. Tom Ridge. In 1997-98, Downing
drew up a military plan to overthrow Saddam, by assassination,
if necessary. The plan hinged on heavily arming dissident gangs
of Iraqi Shi'ites in the south of Iraq, and Kurdish fighters in the
north. Invasion by U.S. Special Forces ground troops was not
ruled out. The promoter of the neo-Conservative yahoos in
Congress and the think-tanks was Wolfowitz, then head of the
Paul Nitze School of Advanced International Studies at Johns
Hopkins University. Unable to ram this plan through the Clinton
Administration, Wolfowitz shopped the plan to Perle, an expert
in "chain-letter" pressure politics, who garnered signatures. Now
at the NSC, Downing has the ready-made plan to hit Iraq.

Richard Clarke, Adviser to the President for Cyberspace Warfare.
Clarke, who was originally with the State Department during the
elder Bush's Administration, was demoted for covering up Israeli
violations of the Arms Exporting laws. In August 1998, Clarke was
one of the key figures who planted false information about
Sudan's involvement in the East Africa U.S. Embassy bombings,
which led to U.S. cruise missile attacks on a Sudanese
pharmaceutical company in Khartoum. Clarke shopped in
disinformation from British-Israeli covert operations stringer
Yosef Bodansky that targetted Sudan.

Elliott Abrams, NSC staff. Abrams, who was convicted in the
Iran-Contra scandal, was quietly placed on the NSC as a
specialist in "religion and human rights." He is a longtime
member of the right-wing Zionist networks that infiltrated the
U.S. security establishment. He worked closely with Secord and
North in Central America, also providing a link to the Israeli
gun-running networks that delivered arms to Khomeini's Iran.

The post that offends you was not intended as a slight against you but as an answer to a personal question as to the apparent transformation in my opinion. If indeed I am a fool, you would do well to ignore me.

You, sir, have aligned yourself to profit from a political move that stands to wreck Europe's economy more so than anyone else's while damaging that of the US and all of the trading partners. While hanging the flag that represents liberty outside your door, you promote as acceptable everything that opposes it. If I suspect some complicity in that horrible event on the part of some members of this administration and some career people in the security services, you should not take offense at my intimation that some among the giants may have had something to do with it.

The political move you have explained is the antithesis of any free market concept. It is not to the benefit of the world at large, it is solely for the benefit of two parties: (1) Europe's governments with the EU bureaucrats and their controlers, who's motives are more suspect (to a free marketeer and believer in liberty) than Stalin's. (2) Arabian oil field owners who feel that they had been cheated by the fact that their product has a declining marginal utility.

Everybody else is among these "giants" is a hanger on. Or an incidental gold saver.

I consider part of the second group (2) to be complicit in the attack on the towers through years of using these same organizations for the purpose of holding on to power to the detriment of the people they claim to care for.

That the US has practiced a monetary imperialism is true. I have worked out the mechanics of its function and attempted to quantify its significance. That the US had to be bailed out (after the fact, I must add) by Europeans who are now trying to do the same thing and worse does not make their moral stature any higher. Nor does it raise yours to present them as the dishonorable people that they must be.

I believe you have been hoodwinked into association with a shameless group of power brokers who have a plan to destabilize the world for their private gain. I don't fault you for the errors of your economic reasoning, nor for falling for their siren's song, as you will stand to gain handsomely from the association and are "paying your dues" to your countrymen by issuing a warning and presenting the reasoning that had been presented to you.

I can never thank you enough for that great effort.

However, I suggest you open your eyes to this and see that though cloaked in self-righteousness these people are self serving parasites on the backs of their people. I can not say that their American counterparts are much better, nor were most of their predecessors.

Finally, fool that I am, I had not considered your feelings in that writing. I apologize for having caused you such distress.

"The euro is not the start of something new, it is a continuation of something old. Old and distressed. With financially distressed socialist governments and decrepit ideas of how an economy works." '

Wrong.

Some old-timers have trouble remembering that it was the material prosperity of 'capitalist' Western Europe that convinced the Eastern Block that "socialism" was a decrepit idea. The revisionism inherent in suddenly reclassifying Western Europe as 'socialist' as opposed to 'capitalist' is hilarious beyond words to folks who live here in Europe. It's like listening to folks arguing that the earth is flat. You just sort of smile, let them have their say, and tell them how brilliant their insights are. But you never invite them home for dinner, lend them money or approve of your daughter going out with them.

It is some 10-15 years too late to be declaring war on the Euro, which is what this is all about. The Euro became the single currency it is today because of Thatcher's refusal to co-operate on a version less threatening to US interests. It seems the geniuses behind trying to scuttle the idea didn't grasp that refusing to toss a few crumbs to the hungry would result in the entire cake being stolen. And it has been. It's far, far too late to regret it. It's time to live with it.

Sir, your trail is clear as day. I thought your trail was as wide as a highway, after having walked it behind you for some time. It gets wider and wider it would seem. Even I can fallow now and not get lost. Let those who hike hike, and those who complain, lets just start leaving them behind. No more reason to go back and explain, lets HIKE!! Onward!

Since the EU is predominantly social democrat and their politics favor central planning and shun the free markets, I am standing by my classification.

Of course the overturning of the euro is no longer a possibility, but the question does remain as to how it is to be used, what methods and mechanics are to stand behind it, and how much of the threatened plan revealed by Another and FOA is on the agenda. Also significant is what the actual economic effect would be.

Depressing day on the trail as a cloud of acidic rain drives hikers to their tents for awhile. I think FOA is right in that the paper markets can and will drive gold to nothing and that paper will burn. All fiats go to zero eventually.
There has never been a time when there have been so many tools available to manipulate markets and public opinion, and the lack of regulatory ethics. Look at what is happening to silver prices when the physical is hard to find (bars) or going up in price (coins). Very strange. This must be the new form of rationing where the little guy is cut out first.....soon to come to the physical gold markets.

I'm skeptical of the euro also, and the desire for excessive regulations/control by the eurocrats. I'm not sure which is worse, the American casino with derivative insurance paper confidence games or them. If you don't have confidence in anyone what do you do? Stay away from other peoples debt obligations and buy the physical.

jb...it would be sufficient to post the link and a comment. There is lots of stuff out there on this topic. Sometimes I wonder who funds these sites and why. Lots of "facts" provided. Those I can check aren't always correct. One statement from the site in your earlier post states that there are 500 years of oil (at current world usage rates) in the Caspian sea region. This is very optimistic. I've heard 50 billion barrels, possibly more are hoped for. Current world usage is 75 million barrels a day and 75mb x 365 days x 500 years = 13.687 Trillion Barrels of oil!!!! Oil should go for about a buck a barrel and Black Blade better sell those energy stocks. I don't think he will. I'm all for freedom of speech and alternative viewpoints, but remember.....rat poison is 98% good corn...or it's not effective. I tend to think of the CIA etc. more as the Keystone Cops using computers and spy satellites and with almost no human intelligence (spies)on the ground providing real information. IMO World Chaos is more probable than one-world government....it's happened before.

Oro--it's not that I don't appreciate your input as a counterpoint to Trail Guides views (which I believe are being gradually validated by ongoing events), but I also am put off by your mean spirited and insulting presentations.

You seem to be very knowledgable about world economics, but you remind me of a university professor I had many years ago who tried to impart fluid mechanics to our engineering class by filling the chalk board with triple integral equations.

Out in the real world, I gained much more value in just using Schaum's simplistic Outline Series books to compute actual practicable solutions. A very intelligent person usually imparts understanding with simple analogies and messages---such as hiking a trail for example.

How absurd that you chose to charactarize today as "gibberish" the writings of another respected contributor to this forum.

I have never pretended to be an expert on economic matters. However, I do know the English language (among others), in part by springing from a lineage of American citizens that traces its ancestry directly back to the second voyage of the Mayflower and beyond. It should be obvious that my own paltry contributions to this forum are more than enough testimony to this. As obviously learned and pretenciously erudite as your writings usually are, here and elsewhere under different atribution, their import is mostly flawed from the vantage of their organization and content within the English language. Without mincing words, they could very accurately often (and mostly) be called "gibberish" without being far off from the mark.

Another serious flaw in your thought processes can be seen in your excessively personal remarks about FOA today. I refer to your habit of continously coloring your analysis and comments with an overlay of moral value judgements. You casually cite "free markets" as if this paragon of concepts is existent in our present world or even realizable in any utopian alternative. This is an idea that is "out of tune" with reality. Now. And probably always. There are no "free markets" in the USA today, my friend! Maybe there never have been! Your assumption that any would-be creators of a system that does not meet your "pure economics" criteria must be "dishonorable men" is simply another example of your emotion-driven thought processes. Your value judgements suffer from the reality that as passionately as you believe in them, others believe in theirs.

And thus you persist in faulting others (and Another) for living in a real world while you clearly inhabit one that most would call madness.

My friend, you are lost in an emotional quagmire. Your words today make that clear. More clear than any economic concept you have ever tried to explain here. Until you go back to your studies, forget about how you think the world should be, and just be happy to figure out how it actually is, you will always be irrelevant.

Please let me be the last person to advocate your expulsion from this board (although many before you have been sent packing for far more trivial reason). Yet I am not loathe to admit that if offered the choice between the realist (and straightforward) FOA and yourself, the very epitomy of turgid writing and emotional thinking, it should be obvious which I would choose.

I hope that FOA sees no need to absent himself by walking the trail of life, political will and/or economics in silence. This would be an irrational emotional response to irrationality and emotionalism. He should not even request your censure. Your words have exposed your thought processes. Fool that you are, he, as do others among us, can see your head hanging in shame and should merely cease trying to persuade you.

http://www.forbes.com/2001/01/30/layoffs.htmlMore "Bones" cast aside today. The "Bone Pile" grows even higher in spite of the lower new jobless claims. One point to keep in mind as well is the statistical deception involved. The words "seasonally adjusted" mean that the numbers were lowered based on some bogus formula to eschew so-called anomalies. This is the Governments version of "Pro Forma" accounting. Look for the total unemployment numbers to continue growing. In a word - "GRIM"

BTW, George Dubya is addressing the "Fatherland Security" issue on television now. I wonder how many Freedoms and Liberties we will lose in the name of "Security." "Interesting Times"

A fool would have no interest in providing the scope seen in ORO's bombastic blather, mixing truth with falsehood in posts to salve over his wounded pride at being caught wrong-footed in the great march of this inevitable, world financial transitional movement. So much barking is the hallmark of small dog complex, impotent against the activity of the real world and lost self-delusional in daydreams.

For those seeking something of investment substance in this, the statement "I buy gold to own" is offered, the bite of a big dog.

PH in LA (msg#: 64971)---"Please let me be the last person to advocate your expulsion from this board (although many before you have been sent packing for far more trivial reason). Yet I am not loathe to admit that if offered the choice between the realist (and straightforward) FOA and yourself, the very epitomy of turgid writing and emotional thinking, it should be obvious which I would choose."

Who appointed you or any others at the site steward over here? The comments today by you Matt and I am sure some others are not needed and are not productive.

How about looking back over the past few weeks and see how many accolades that FOA, Another, and ORO have received from the many posters here.

Some of the comments posted here today I am sure will be regretted by all (including you two).

Let's let the dust settle. I for one do not wish to see any of these posters quit posting here or be banned for their ideas or disagreements, and IMHO you are way out of bounds in even bringing it up.

Since everyone is suggesting something, I suggest that we talk about Gold for a while. The Euro and Fed bashing and poster bashing has run its course for today.

Bush is giving a great speech. I for one will devote my attention there for a while.

Kia Ora Sir, I have read much on the 'Trail' about the paper trade & derivatives markets & the parting of the ways thereof between that & the physical metal pricing mechanism (starting to happen now yes).

Are you able to give a chronological breakdown scenario of how this will occur for the Au & Ag markets (really one and the same derivative wise IMO) and what "fiat bail outs" will occur (if any)?
- Thanks Netking

WASHINGTON (Reuters) - U.S. workers left jobless in an economy battered after the September hijack attacks are staying that way, as companies put hiring on hold pending better economic times, the government's latest figures showed. And with the fear of job losses high, consumers have shifted their spending -- albeit meager -- to discount store chains instead of the more expensive department stores, a trend analysts expect to continue for several months. ``This is a very typical reaction by consumers,'' said Sung Won Sohn, chief economist at Wells Fargo Bank in Minneapolis, one of many economists who expect the labor picture to weaken further over the next few months.

In its latest report, the Labor Department said the number of Americans remaining on state unemployment benefits for the last full week in October was at its highest level in more than 18 years. And while fewer Americans applied for first-time unemployment benefits last week, the level of these initial claims has been substantially higher than levels seen the same time last year.

Black Blade: Yep. And gonna get a lot worse. Time to grab cheap Gold and Silver.

I don't think PH in LA will have any reason to regret his defense of FOA tonight or at any time in the future. What ORO said (though he has to some extent apologized) was cruel and insinuating. It's only natural that FOA's fans (Friends of FOA?) speak up for him.

This is no different from yesterday's defense of Reg Howe. Mr. Howe undoubtedly reads all the gold fora and could easily have written in to defend himself against jb's tasteless remarks. He chose to remain silent, and others -- including you -- rose up to defend him.

PH himself said he would be among the last to call for ORO's banishment, I imagine because he believes in free speech. So what are you complaining about?

People, I am sorry to have written personal Email material on the board.

Not having slept the night and still recovering from a nasty cold I did not pay attention to what I was writing, not thinking that it would be public.

Please disregard the two posts if you can, the message was not intended for public consumption and definitely not for FOA to read.

Having taught fluid mechanics complete with incomprehensible integral equations, I can say just that Schaum's outline series stops well short of conveying the complex reasoning behind the simple formulas and the integral mathematical representations do a much better job if you are willing to learn their language.

Economics, particularly when combining quantitative calculations with Austrian theory, is based on simple principles but with long and sometimes complex chains of reasoning.

For the most part, outside the most fundumental of economic principles, if it is simple it is most likely wrong.

Over the next couple of weeks, the world will witness a dramatic change in the situation in Israel and the Palestinian Authority territories. These changes could potentially effect the entire Middle East region, said Nabil Abu Rudaineh, Palestinian Authority Chairman Yasser Arafat's media adviser. He said that the region will shortly note either an increased stability and move towards peace or a downward spiral into all-out regional war . . . "

In today's posting you write, "My spirit is low, I will walk this trail in silence."

I have so thoroughly enjoyed your postings since your return to the forum. To be honest, your views and insight help me keep my spirits up in these very difficult times. I am sure many others here who share my sentiments.

There are plenty of fools in the world. It is best to just ignore them.

Your postings are a truly valuable contribution to our understanding of politics, money and gold. It is important for each of us to make some contibution to help others who otherwise would be gravely hurt by the coming hyperinflationary malestrom. If you message saves only one person from this storm, it is worth it.

We live in very strange times. Some of us here just happen to have the "wrong" type of parents or grandparents or follow a form of monotheism that is greatly misunderstood. The fools have made the lives of some of us quite miserable in recent weeks, and for no fault of our own. We too remain patriots, loving the freedoms that brought our ancestors ot these shores. The fools have to be suffered and ignored, otherwise life would become unbearable.

Freedom of expression is precious. It is the intolerant who would silence all true patriots. No need to walk in silence, your precious words are a gift to those of us with open minds. We hope you will not leave us stranded without a guide.

In the midst of America's greatest national
security crisis since World War II, two of the
three major television networks declined to
interrupt regular programming to broadcast
President Bush's address to the nation
Thursday night on the ongoing war on
terrorism.

Speaking from Atlanta's Centers for Disease
Control, Bush talked about the anthrax attacks
that have plagued the country for the last
month, killing four Americans and exposing
dozens to the deadly bacteria -- including
employees of ABC, NBC and CBS.

But with America at war and the FBI predicting
additional terrorist incidents at home, both
CBS and NBC stayed with regularly scheduled
programming for the half-hour address.

Only ABC carried the Bush speech live.

Rather than switch to Bush, NBC stuck with
perennial ratings booster "Friends," while CBS
carried its own ratings winner "Survivor."

In the past, TV network news divisions have
declined to carry presidential addresses only
when they were deemed not newsworthy or seen
to be too overtly partisan.

Read more on this subject in related Hot
Topics:

Bush Administration
Media Bias
War on Terrorism

A product that might interest you:
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"
Is a long-time court-reformer/TV reporter supposed to know about EVERY
judge he comes across? I have been a court-reformer since 1958 and part of a
weekly non-commercial TV program since 1991. Since 1995, I have been the
moderator/producer of the program called "Broadsides", a public access
Cable TV show. I cannot be expected to know every judge. After all, in the
Chicago-area, for example, there are hundreds of judges.

I came to court on October 29, 2001, in litigation involving an associate of
mine, Joseph Andreuccetti who assists with the production of our show in
Chicago. I was there as his paralegal, to take notes, and also as an
alternative media reporter.

Maybe I should have been immediately suspicious when the Judge, Samuel
Betar III [(312) 603-4371], threatened me, apparently to jail me, if I didn't
stop taking notes. He shouted and hollared at me, demanding I go to the rear
of the courtroom. I was alarmed when the judge threatened to also jail Joe
and he had a heart attack.

What was going on here? Understand something. I am a paraplegic in a
wheelchair and Joe and his wife Noemi often drive me where I have to go and
assist me at my residence. I tried in court to wheel over to where Joe took ill,
and the Judge hollared at me and threatened me again. I told the Judge to
stop falsely threatening to jail Joe, since I depend on him. The Judge would
not permit me to go over to see what happened to Joe.

Paramedics along with about six armed guards arrived and took Joe away on
a stretcher. I was not allowed to accompany him or to find out rightaway what
was going on.

My subsequent investigations uncovered plenty about Judge Samuel Betar
III. Later was filed a Motion to try to force the removal of Judge Betar from
the case, to stop him from falsely threatening to jail me and Joe. Filed in
support of that motion are my signed statements of what I uncovered. From
the court record are verbatim what is stated, numbered as they are there

1. I understand this this instrument under [citing Illinois law], has the same
force and effect as if it were an Affidavit sworn to before a notary public.

2. I am a traditional Jew, of the Jewish race and religion. My associates
Joseph Andreuccetti and Noemi Andreuccetti are perceived by their
opponents and enemies as being partly Jewish.

3. Judge Samuel Betar III is closely aligned, including financial, with Suhail
"Steven" Al-Masri who is the Editor-in-Chief and Publisher of the Al-Salam
Newspaper, which has been circulated in the Chicago area and elsewhere."

4. Said Newspaper was operated at 8150 W. 111th Street, Suite 11, Palos
Hills, Illinois, which was the offices of "Steven".

5. Said newspaper has published what those of the Jewish race and religion
perceive as vicious anti-Jewish and anti-Israel propaganda, calculated to
slander and defame those of the Jewish race and religion.

6. "Steven" has been the purported owner of an airplane pilots training
school which has likewise been headquartered at 8150 W. 111th Street, Suite
11, Palos Hills, Illinois. Law enforcement personnel have been surveilling
"Steven" because, they contend, his school has been used by purported
"terrorists" who apparently had and have been planning to seize U.S.
commercial airplanes for the purpose of sabotage and violence to be inflicted
on U.S. persons and properties."

7. Part of law enforcement and other government surveillance of "Steven"
has also included Judge Samuel Betar III, who is financially and otherwise
closely aligned with "Steven" according to such government personnel.

8. According to covert surveillance, "Steven" received numerous calls from
topmost officials in the Springfield office of Ilinois Governor George H. Ryan.
Because of the close relationship of "Steven" with Judge Samuel Betar III
and they, in turn, with Governor Ryan, law enforcement personnel contend
they are precluded from taking any action against either "Steven" or Judge
Betar, or both, jointly. Further, "Steven" has been photographed with Illinois
Governor George H. Ryan."

9. "Steven" has been the owner of Royal Financial Group, Inc.,
headquartered at 8150 W. 111th Street, Suite 11, Palos Hills, Illinois. Law
enforcement personnel contend that said business is, in part, an apparent
front for clandestine dealings with a Foundation in Bridgeview, Illinois[a
Chicago suburb], identified by the U.S. Attorney General and the U.S.
Department of the Treasury, as being a purported "terrorist" linked
organization and enterprise, funneling funds in the U.S. and to the Mid-East
and elsewhere for purported "terrorist" activities directed against U.S.
citizens and properties."

10. As part of activities to promote their front enterprises, as aforementioned,
"Steven" and Judge Samuel Betar III have two slide photographs posted on
his and/or their, website, http//www.noribahomes.com. Said photographs
appear to have been taken inside the judicial offices of Judge Samuel Betar
III for the purpose of promoting their joint businesses and financial activities.
Copies of said photographs, reproduced from said website, are attached
hereto and made a part hereof as Exhibit One." [The said
website-reproduced photographs are in the court record attached to my
signed statement and show "Steven" and Judge Betar.]

11. Law enforcement personnel assert they are precluded from taking action
against Judge Samuel Betar III and Suhail "Steven" Al-Masri, despite law
enforcement contentions that "Steven" and Judge Betar appear to be
Chicago-area links to Osama bin Laden and his al-Qaeda network.

12. According to those who know him well, "Steven" went low-profile, if not
totally disappearing, prior to the purported "terrorist" violence on September
11, 2001, directed against lower Manhattan and the Pentagon. Law
enforcement personnel contend they would want to interview him as to his
activities including with Judge Betar and the airplane pilots training school, as
aforementioned. "Steven's" apparent dropping out of sight tends to support
law enforcement contentions that "Steven" with his aforementioned activities
has something to conceal, along with Judge Betar."

13. Both Judge Samuel Betar III and "Steven" have been in a position to
note that Sherman H. Skolnick has a popular website where he often
comments on activities in the U.S. for and on behalf of Osama bin Laden, the
bin Laden group, and similar persons and groups linked to them. Skolnick's
website is http//www.skolnicksreport.com."

14. As stated in Skolnick's prior [court-filed papers], Judge Betar impliedly
sought to falsely jail Skolnick, a paraplegic in a wheelchair and to seek to
falsely jail Skolnick's close associate Joseph Andreuccetti who was caused to
have a heart seizure in the process of the Judge seeking to falsely jail Joseph
Andreuccetti.

15. As stated herein, the matters here are to be considered as a supplement
to the [prior court papers]. If he thinks he can get away with it, Judge Betar
would again, as a reprisal, seek to falsely jail Joseph Andreuccetti and
Sherman H. Skolnick."

16. As stated in the prior [court-filed papers], Skolnick was the paralegal
accompanying Joseph Andreuccetti on October 29, 2001, for the purpose of
sitting nearby to the proceedings so that Skolnick could hear what was
occurring and take notes. Judge Betar, under the sham and pretense of law,
interfered with and blocked Skolnick from taking notes, which were
necessary since no official court reporter was present. Skolnick understands
that the doings of Judge Betar, to block Skolnick from taking notes of the
proceedings, are offenses by Judge Betar made actionable against Betar by
42 U.S.C.A. Section 1983 et seq. [The Federal Civil Rights Acts, used to sue
State officials for wrongful conduct.] Judge Betar and "Steven" harbor a
deep grudge and deep prejudice against Skolnick and Joseph and Noemi."

17. Under these circumstances, no reasonable person could expect Sherman
H. Skolnick, a traditional Jew, and Joseph and Noemi Andreuccetti perceived
as partly Jewish, to be fairly dealt with in the courtroom of Judge Samuel
Betar III. Judge Betar, under the sham and pretense of judicial authority, has
used his judicial power to terrorize Joseph Andreuccetti and his close
associate Sherman H. Skolnick. This is a reprisal for Skolnick's comments,
assisted by Joseph Andreuccetti, on Skolnick's television program as well as
his website."

18. It is no answer that law enforcement has the power as aforementioned to
take action against Judge Samuel Betar III and his close associate "Steven";
and that such law enforcement personnel are precluded from doing so
because of political and other considerations permitting Betar and "Steven"
to act with impunity against the public safety and interest, and against
Sherman and Joseph." [End of Court document, in Case No. 97 M1-132033,
pending in the Circuit Court of Cook County, Municipal Department, First
District].

Notice these further strange connections. Judge Samuel Betar III is an
immediate family member of Samuel Betar once law partner to David
Schippers, former federal prosecutor and Chicago lawyer, and Special
Counsel to the House Impeachment of Clinton Committee. Perceived by
some as a long-time CIA operative calculated to blackmail Clinton and
others, Schippers was assigned to the Impeachment position by then House
Judiciary Committee Chairman, Cong. Henry Hyde (R., Ill.) As we have
pointed out in several previous stories, Hyde at the same time has been
secretly head of the CIA's "Black Budget" for dirty tricks including political
assassinations. By he way, under the Separation of Powers provision of the
U.S. Constitution, it is unconstitutional for Hyde to wear two such hats at the
same time. Called "Uncle Henry", Hyde supervised the CIA's dope
importing into the Southern states, including through the CIA airport at
Mena, Arkansas. He was boss, of sorts, of those running the dope/gun
smuggling operation, including Bill Clinton, George Herbert Walker Bush,
and Ollie North.

On talk radio, David Schippers contends that through his close contacts in the
FBI, that he found out there was "terrorist" violence expected in lower
Manhattan. Schippers says he has proof he tried, in vain, to force prior
proper action by the new U.S. Attorney General and likewise by the Bush
White House about a month before September 11, 2001. They did not want to
know, Schippers says, and instead his FBI friends are facing reprimands for
having tried to alert the higher ups at FBI. [Notice the related item from
BBC, reported by the Times of India, 11/7/1, based on secret FBI
documents,"Bush Told FBI to 'Back Off' Investigating bin Laden Family".

Questions with no immediate answers Is America's secret political police, the
FBI, supposedly running after "terrorists", going to do anything about U.S.
public oficials apparently linked to "terrorists"? And what is the head judge
of that part of the Cook County Court system going to do, if anything, about
what has been set forth? I brought the matters, as stated herein, directly to
the attention of Judge Jacqueline P. Cox{(312) 603-6132], head of the
Municipal Department, First District, of Cook County Circuit Court.

It seems like the bench and the bar conduct their dirty business quite a bit
with blackmail and even terrorist-style threats. Are there reportedly
"terrorist" linked judges where you are? If so, WHO, if anyone, is going to
do somehing about it?

I know that you have been forgiving of posters mistakes in the past and I request that you and others understand ORO's here.

Leigh (msg#: 64978)---

I was very disappointed in your recent post to me. For someone to say that he would be the last to advocate expulsion and then advocate it various ways in the following sentences, IMHO, is not the way that I read the post of PH in LA. (BTW-A person that you have accused in your own posts of spewing communist garbage and who you said never posts about Gold).

What I suggested in my previous post is for everyone to let the dust settle and let's post about Gold for a while. I continue to advocate that especially in lite of ORO's recent explanation. I know that you have been forgiving of poster's mistakes in the past and I request that you and others understand ORO's here.

Jb: Yes, regretably, these things go on, but they also work in reverse too. And, I am sure you will agree, Jewish people are more than well represented in the Judiciary, and in the law profession in general in the United States. And many (Jewish people)have shown - even those born in the United States, that their loyalty lies first with the State of Israel, and second with the land of their birth.

You must remember, also, that Bin Laden has been an ally of the United States (perhaps still is if the real truth were known). And there is enough evidence it appears of a close association with the CIA.

Is there some, perhaps even remote, connection here with Gold that I missed?

I get through the nasty hours after work and the dinnertime inquisition and escape to my refuge at USAGold, to my friends with high ideals and level minds. And what do I encounter, as I scroll down the page with mounting dread?

In fact, this morning I was just looking up some books on "anger management" to try and understand what I have to deal with regularly, and am blindsided by again and again. Trusting soul that I am. It tires me immensely.

We've seen each other's tempers here before, and probably will again. But the place to meet is on the high plain of facts, and those who contribute to my journey there are the "family" I seek at this hour of the day.

FOA and Oro each practice a form of magic picture-painting that challenges my mind to rise higher in understanding. IF we were not anonymous, and were like scholars at a university face-to-face, we could inquire more easily into the backgrounds of each other's assertions. We could follow every lead to more of a conclusion.

But here on the 'Net, we have a more difficult medium through which to exchange our ideas. It has its advantages, and its drawbacks. The drawbacks dictate that we give each other a lot of latitude in the writings we share daily. Proof is particularly hard to offer up here, and so it is more in the nature of "painting a picture", which is what these two do so well, in very opposite styles.

Personally, I know that I do not know enough to either confirm or negate what they offer. So I remain a student, necessarily a humbler one than I was 30 years back.

(Regardless of economic theories, in life we must act, and I have acted on FOA's counsel.)

The man also operates on some levels beyond economics; I think we can all see that. His sparkle and joy soar into philosophy, and his language takes on a poetry that turns keys in mental locks I didn't know were there, or were shut. A long, slow process I'm sure, but if this isn't how you go about it, then I don't know how.

These are some of the things that make me think he's for real.

I turn over in my mind occasionally what kind of worldview a man with his experience must have. I think of myself 20 years ago, and, if he is 20 years ahead of me, try to imagine how broad a view of life I might have by that time.

One thing I can tell is that FOA is experienced in many areas of life, finance, and politics, but he has chosen to embark on a project of discovery, in which he can continue to learn. Is some of his frustration with us because we do not always match his level of enthusiasm for the subjects he is discovering?

We've been through a lot in two years I've been here, and I don't think I'm being played with here. If FOA is wrong, I don't think I will be hurt by it. If he is right, I am going to be ahead, way ahead, in understanding as things develop. This is the opportunity I am grateful for. I don't think I could have found a better one, if I had searched and searched. This one was a bonus for me, a blessing. It fits with the kind of person I am, the way I like to learn and live.

The only other older man I've shared that level of discussion with is my father. There were still frustrations, and clashes, even in our mutual quest for facts about economics, history, and life. We see many things differently, but we still really enjoy the meeting of the minds that is possible sometimes.

I guess that has been my springboard for appreciating FOA. I don't expect a guru, but I do hope to be WISER when I am older. FOA presents me with that model of a man who shows WISDOM for having been around a bit longer. I hope his wisdom tells him to stick around where ideas are the currency of exchange, and wisdom is the wealth.

Insults have no place here, and apologies should be acceptable among gentlemen. We each have a work to do; let us be about it.

During the oil boom of the 1970s, the debate was drowned under a flood of money. The Saudi royal family lavished benefits in all directions, pouring money into religious schools and universities, paying tuition for study in the United States or Europe by those who looked elsewhere. It underwrote housing, utility and other expenses in the bargain. Government jobs were there for the asking. Foreign workers kept things ticking, with imported Western expertise managing the oil industry and Arab or Asian countries supplying the manual labor.

Today, per capita incomes have fallen more than half since 1980, when they equaled that of the United States. The government is in debt and pressed for ways to create wealth and jobs beyond pumping oil. The proposed solution, foreign investment and more openness, has collided with a suspicion of change that harks back to Abdul Wahab's roots.

Underlying the debate over the implications of the Sept. 11 attack for Saudi society, therefore, is a more fundamental anxiety over whether the country can accommodate the expanding number of professionals, investors and others who want, and say the society needs, a more modern economic and political system. A sizable and powerful network of people still believe the country's franchise -- and the Saudi ruling family's legitimacy -- rests on defending strict Islamic traditions.

Black Blade: It has been suggested that the House of Saud is ripe for overthrow. With perhaps as many as 15 of the 19 terrorist hijackers of Saudi origin, there are many more waiting in the wings. Osama Bin Laden's religious zeal had his roots in the Wahabi sect. He has many followers throughout the Islamic world and now as westerners engage in what is perceived as a war against Islam the stability of the Saudi Government is in question. This also brings into question the security of world oil supply as Osama Bin Laden has openly stated that oil should be priced at $144.00/bbl. The war in Afghanistan could be just a prelude to a sweeping Islamic revolution in the oil producing regions of the Middle East. The end result is an economic Jihad against the western "infidels." For national security reasons, the US is well advised to seek energy independence sooner rather than later.

Dear FOA,
This is my first post after lurking some 2 years here at the very best gold forum I've ever seen. However, it would NOT be the same without the thoughts of you and Another. As I am a being with no real economic background, I can briefly just summerize how I have interpreted your message (and followed it so):
- buy physical gold (!).
- euro's "may" do better than dollars (in terms of keeping buying power)
- the paper gold pricing system is collapsing (with the dollar), and you have given a unique explanation to this.
I am certain than 99.9% of all your readers pick up your message to buy physical gold, and I can't understand how some people can be disturbed by that.
Don't mind people who try to interfere with your thoughts with dirty tricks, for some egocentric reasons.
I truly hope the hike(s) will continue, in these "interesting times".

Sincerely,
wart (sweden)

PS. I'll see if I can contribute some myself, or just slip back into lurking. Thank you USAGOLD for this venue!

NEWPORT BEACH, Calif. (AP)- The largest known gold bar from the California Gold Rush - a bread loaf-sized brick named Eureka - has been sold for a record $8 million, officials said Thursday. The ingot was bought by a collector described only as a ``Forbes 400 business executive,'' said Michael Cabrini, president of Monaco Financial, the Orange County-based rare coin company that handled the sale.

The sale nearly doubled the record set previously for the sale of collectible money. In 1999, a single silver dollar sold for more than $4 million, said Donn Pearlman of the Professional Numismatists Guild. ``They sold the artifact that was THE piece of numismatic history of the California Gold Rush,'' he said.

The bar was handmade in 1857 by California assayers Don Kellogg and August Humbert. Weighing nearly 80 pounds, the bar's face was stamped with its 1857 value - $17,433.57. On Sept. 3, 1857, the bar was loaded onto the SS Central America in San Francisco. The ``Ship of Gold'' was bound for New York where the gold was to be turned into coins.

Eight days later, the ship was damaged in a hurricane and sank Sept. 12 more than 140 miles east of Cape Hatteras, N.C., in 8,000 feet of water. More than 400 people died. The lost riches helped spark an economic depression that lasted three years.

LONDON (Reuters) -- World oil prices jumped sharply on Thursday after the world's biggest exporter, Saudi Arabia, said the OPEC cartel could easily make a bigger supply cut than previously thought to revive flagging revenues. Saudi Oil Minister Ali al-Naimi said the Organization of the Petroleum Exporting Countries (OPEC) could easily cut 1.5 million barrels per day to trim an oil supply overhang that has grown as recession looms over the world economy.

Black Blade: As prices for oil falls, more cuts are made in response. When oil prices falls below $22.00/bbl, OPEC production cuts are made to keep the POO in a trading range above $22.00/bbl. The question is whether a cut of 1.5 million bbl is enough.

There is no shortage of people wedded to the system of value exchange using ephemeral promises written on paper who will put forward apparently-convincing intellectual arguments against a prudent ownership of physical gold in one's portfolio:

Remember that the ability to structure a complex argument that examines numerous data inputs, discourses at great length, and draws detailed conclusions, even if written with meticulous spelling and grammar, and in the best style of authorship, does not mean that the conclusions are correct. This observation is often useful to remember when one's eyes start to glaze over at the apparent brilliance of a lecturer or author.

The best kind of argument is one that is brief, succinct, and expresses a simple clarity. You will certainly find those arguments on the subject of gold.

Here are some apt quotations:

"Intellectual brilliance is no guaranty against being dead wrong"
- David Fasold

"An intellectual is a man who takes more words than necessary to tell more than he knows."
- Dwight D. Eisenhower

"Like most intellectuals, he is immensely stupid"
- Marquise de Merteuil

"What passes for optimism is most often the effect of an intellectual error"
- Raymond Aron - The Opium of the Intellectuals

"We must defeat Al-Qaeda, we must end Osama bin Laden's terrorist threat to the world and deal with the Taliban regime who has given them haven," Powell said after meeting with Kuwait's Deputy Prime Minister Sabah al-Ahmad al-Sabah. "After that ... we will turn our attention to terrorism throughout the world, and nations such as Iraq, which have tried to pursue weapons of mass destruction, should not think that we ... will not turn our attention to them."

Within the administration, the most visible advocate of attacking Iraq is Deputy Defense Secretary Paul Wolfowitz. Ten years ago, as defense undersecretary, he clashed with Powell over whether to send US forces all the way to Baghdad after evicting Iraqi troops from Kuwait.

Behind Wolfowitz lies a network of veteran Washington hands whose political savvy, talent for polemics and bureaucratic intrigue, media and intelligence contacts, and lust for ideological combat have made them a formidable influence on foreign policy for almost 30 years. Their core is made up of "neo-conservatives" - former Democrats, often passionately committed to Israel, who broke with the party over the Vietnam War and moved steadily to the right. They recruited prominent New Republicans, like former House speaker Newt Gingrich, as fellow travelers.
------------------------------------------------------------
"...Much has been made and discussed of the approximately 11-year sunspot cycle...it fits with a key longer-term Cycle of Time cycle of 133 months�It has pinpointed many critical wars in the recent history of the Middle East and their impact on America...and is back to haunt us from now until late-2001..."
Netking - Lets make sure none of them "nasty war sunspots" come near this golden place.

Durban Roodepoort Deep [NAS:DROOY], the South African marginal gold producer, says it will close out its entire hedge book by the middle of next year. If the company meets its June target, it will have shaken off the greatest impediment to its profitability and consequently its valuation. The hedge is underwater and costs the group about $1.47 million (R14 million) a month in hard cash and a more insidious $1.26 million (R12 million) in opportunity costs each month. Ian Murray, the group financial director, said yesterday DRD would be unhedged by June - a full two years before it was expected to exit the cash-sapping hedge. The hedge has been a drain on resources and profitability on two fronts, with "longs" and "forwards" both way out of the money.

Black Blade: Yet another hedged Gold miner soon will join the ranks of the Gold longs. Hedge Funds Barrick (ABX) and AngloGold (AU) will soon be alone with massive short positions praying that the POG does not rise and bankrupt them.

Well, I just finished reading those posts, and you really did get going, bro. Crossing several lines on that speedy motorcycle of yours.

I hadn't realized the level of opposition you felt toward that Euro thang, and it is really not possible from the structure of our daily readings here to retain the full picture of its operations as seen by you. I guess that's why I'm glad we can take a longer TWT -- "time will tell" -- approach to this and see what the Euro does, again in harness with observers who can point out the landscape as it goes by, that we would have missed.

Is it possible that sometimes you get pumped on your own rhetoric (I know I do), or have you really been holding back all these months/years and just now let us in on your thought processes? (I'll have to read that chronology again.)

Do you put it out here to get feedback, critique? Hear what it sounds like when it's out there in others' faces? Do you have other conversers to bounce these ideas off of?

This is difficult to parse, but what I'm asking is, after tracking economic trends and stats a couple levels deeper than the usual pundits give us, and then coming to some original conclusions as to their import (at least, this is how I see you proceeding), then your mind proceeds with a momentum that seems to _require_ a momentous conclusion at the normative level. But it's more of a feeling thing than a logical progression.

(Why am I getting Spock and James Kirk face-off images now, from several episodes?)

Just a thought ( or series of). But what I find lends credibility to your steps is that you have not started with the usual American xenophobia or coded anti-semitic distrust of "European bankers", nor sprung out of the NWO suspicions, but you arrive at a critique of Europe's directions on your own. (From my limited viewpoint, so it seems, anyway.) Is this at the level that the brokerage analysts study the Euro and Europe's economy, or do you possibly outdo them?

Hey -- gold ain't doin' much, seems like. FOA's got us talking Euros. Something we don't know piddly about if it weren't for reading here. And we're still figuring out just HOW to learn about it here, what to look for, and what might be mere distraction.

Is it just the plumped-up heir to the D-mark? Or the beneficiary of extra power from taking over a "currency area" as Mundell suggests. But even Mundell has never sounded as optimistic for it as FOA has. Is Mundell merely maintaining academic "respectability"? That Nobel to the "Father of the Euro" was a pretty significant signal in the year of the WA spike, no? Somebody thought Something Important was going on...

ge made a point about the potential weakness of the dollar demand, as debtors give up trying to earn their payments. I still have to go back to your numbers, and see what adds up to $460 Bil.

no sleep, fighting a cold, sounds familiar. Fever here. You've responded to so much recently; just say "can't handle that now" once in awhile, eh? Iron Man? Fuhgeddit! Off to Z-land...

JOHANNESBURG - AngloGold chairman and chief executive Bobby Godsell believes the deregulation of the Chinese gold market could lead to a 15 per cent increment in annual gold demand over a number of years. China is due to open its first gold market in Shanghai, possibly before the year-end. It has already deregulated the retail price of gold. Godsell was speaking on Classic Business, a business radio show in South Africa. "There's good progress there [China]. The retail price has been deregulated, and that only for a couple of months. We have yet to see the full impact of that and we are hoping by the end of this calendar year that China will open its first gold market where manufacturers and retailers and, indeed, traders will be able to buy and sell gold outside China," he said.

Godsell estimates that the Chinese market could grow in a similar quantum to that of India.

Black Blade: Optimistic and yet AngloGold has a massive Gold short overhang that will be crushing if the POG rises.

"Sticks and stones make break my bones but words will never hurt me" I might add to that "only if you let them". Most of my meager economic education I have received on this forum in which you and ANOTHER have played a important part these last 2 or 3 years. Although the trail ahead may be crooked with turns here or there ,there in no doubt that looking back we see how straight the trail has been. I look forward to each posting of the Gold Trail it is one of the joys of my life to read your straight forward and insightful analysis of the coming events. And, after all the proof is in the pudding. There is no doubt in my mind that one day in the very future we will all with your direction be able to yell "To the moon Alice". White Hills

RE: "Words of a fool"Kind Sir: In asking for the response I received and expected I accomplished my goal of revealing thoughts which are, in my opinion, emotionally charged and highly ideological. This was done for a purpose. I wish to see the world as it is; not the way I wish it to be. Your commentary is the "plausible exlanation for the surreal" I have been looking for. Thank you.

Hi:
Kitco no longer offers the 100 oz silver bar. They were selling this one month ago.
But there's no silver shortage........right? Can't be a shortage, the COMEX price is
falling....... (snicker)
What does it mean when the price of a substance falls while there is an ever-increasing shortage
of supply???????? Notice how the inventory of gold products on the list is still complete,
but silver's product list is shrinking. One is tempted to say that Kitco has dropped the
100 ozers because of a lack of demand for that particular form of silver. But there is
a widespread shortage of the bar, not the demand. I have heard this statement of no
100 oz silver bars from NZ, and the US as well. You can buy them on EBAY for about
$800 Canadian plus $C20 shipping. Do I detect a separation here from COMEX spot
prices?????

B.

Perhaps the waiting period was getting to be too long for Kitco customers?
But I seem to remember a mention of a shortage in Europe too....

"The man also operates on some levels beyond economics; I think we can all see that. His sparkle and joy soar into philosophy, and his language takes on a poetry that turns keys in mental locks I didn't know were there, or were shut. A long, slow process I'm sure, but if this isn't how you go about it, then I don't know how.

"These are some of the things that make me think he's for real.

"I turn over in my mind occasionally what kind of worldview a man with his experience must have. I think of myself 20 years ago, and, if he is 20 years ahead of me, try to imagine how broad a view of life I might have by that time.

"One thing I can tell is that FOA is experienced in many areas of life, finance, and politics, but he has chosen to embark on a project of discovery, in which he can continue to learn. Is some of his frustration with us because we do not always match his enthusiasm for the subjects he is discovering?"

Mr. Gresham, I wish there were some place on this website to memorialize your words.
_______

BR549, sometimes you just have to give the devil (I'm talking about PH here) his due.
_______

ORO, I read your apology post many times and do understand your point of view. Thank you for phrasing it in a more gracious way.

Blackblade Barrick and Anglo Gold are not to be underestimated - they are well and truly in the hands of the 'brotherhood'. In other words they are most unlikely ever to be 'victims' of any manipulation policy towards gold.

Then, I am sure you knew this.

It all seems to be pointing to 2002 - many things converging. No rockets to the moon next year - I'll guarantee that. I prefer a steady climb - no wham bam thank you mam as the lady said to the Bishop.

First of all, we do not get the 100oz bars in Belgium, only the 1 Kg bars. To test the shortage rumor, we ordered 10 kgs from our local KBC. It took 3 weeks for delivery. The chap gave all kind of excuses initially - your order was only small and we had to deliver the big orders first. During the 3 week period he tried hard to get us to buy gold. Eventually, when delivery took place, he said there had been some 'odd' activities (i.e. lots of orders)in the Ag market, that was why they could not deliver. We have not had the experience with the yellow stuff, yet!

Derivatives-The art of high class gambling at Central Banks around the world

"A derivative is a contractual relationship established by two (or more) parties where payment is based on (or "derived" from) some agreed-upon benchmark."--COMEX

Why derivatives for Central Banks?
The purpose of derivatives originally was as a "risk shifting" tool to limit a CB's exposure to shifting interest rates, the CB's own currency values, volatile exchange rates, and CB investments in other "paper" equities. Now derivatives are traded like other paper with a market within itself.

The first red flag concerning derivatives is that there is not a defined list of all of the derivatives available as new ones are being created everyday. The common financial derivatives have the medium of exchange (ex. COMEX) and the rate, type, time, and amount of repayment specified in advance.

Why are their problems with Central Banks (CB's) dealing in derivatives?
The main difficulty is that CB's financial statements are supposed to represent actual amounts and derivative use by their very nature prohibits an analysis or real values and masks CB's underlying exposure to high levels of risks.

Repayment of derivatives can be made in either the CB's currency, another CB's currency, various forms of "paper" securities & financial instruments, or PM's such as their owned Gold and Silver. Each asset pledged for repayment is then even more complicated by daily "mark to market" moves in the relative valuations of these underlying values.

The derivative contracts may call for repayments by the CB at the exchange rate in effect at the time that the derivative is entered into, i.e., repayments may be made in actual amounts of USD or CB currency.

OR these repayment amounts may variable by being tied directly to fluctuations in relative values and movements of interest rates, the stock market indices, commodity prices, or currency exchange rates. If underlying assets are moving in favorably in the CB's direction, then this leveraging increases (and sometimes multiplies) the amount returned to the CB and raises the rate of return the CB's may obtain on each derivative contract entered into.

Conversely if the gamble moves unfavorably, the CB will have exposure to massive amounts of risk of losing their contractually pledged asset because of repayment obligations. Actual delivery of the underlying asset (Gold) may be specified or the "paper" risk may be offset by an offsetting derivative contract which will "cover" or close the original derivative.

One question is since most derivatives are covered by "paper", what happens when it is not?

CB: Pledge or hedge?
Since the use of derivatives are utilized to shift risk, a CB must decide if it wishes to assume the risk or hedge itself against a potential risk. With inventories of Gold, a CB may pledge its assets or hedge its assets. Or do both.

For instance a CB may choose to pledge its Gold as collateral for derivative contract A and offset its gamble by taking the opposite position demanding delivery via derivative contract B. If both contracts are carried out as per the terms and conditions, then the CB either adds or subtracts from its total investment made.

The key to a CB hedging their bets in reference to derivatives is to limit the volatility or price trading range of the asset being pledged. (Like leasing or short selling Gold to impact the POG). The problem with increased volatility is that the CB will have difficulty in determining the risk exposure that the derivative has on the economic health of the CB's assets, which could adversely impact and effect its ability to assist its member banks in maintaining theirs.

How do CB's value their derivatives?
This is particularly difficult if these derivatives are to be settled with values determined on the date of settlement rather than the date of contract. The amount of actual exposure cannot be determined and valued in the CB's financial statements. The impact of being on the wrong side of a massive derivative can have devastating consequences that are not identified until some future time period. Not at all the way the financials of a giant "responsible" entity like a CB should conduct its business. Often, individuals that work within the CB's (or member banks) can gamble right along with the CB if they possess insider information as to what derivatives the CB will acquire or hedge against. The higher the risk assumed (or hedged), the higher for potential ROI or loss becomes.

Unlike most investments that CB's make where they can enter into a deal and forget about it until maturity, derivatives take highly competent staffs of financial professionals who must monitor the investments constantly 24/7. Increases in volatility of underlying prices moving in the opposite direction of a pledged asset, such as inventoried physical Gold, may cause catastrophic results and damage to the financial well being of the CB in the long run.

Paper is generally offset by paper and closed out periodically. But what happens if the system breaks down. But if "paper burns" and "physical delivery of Gold" is specified, then the CB has not met its moral or fiscal responsibilities to its citizens. If the CB loses its citizen's Gold because of investing in derivatives--Is it really worth the gamble?

The only sure way to hedge yourself against the gambling of the CB's is to buy physical Gold. You can't lose.

Though I would like to think that the lack of one hundred ounce silver bars in the market is the result of a shortage, in the interest of objective analysis, I need to point out that the reason for that is rather straight-forward. They (the refiners) don't make them anymore, but make 1000 ounce industrial bars instead. And the reason for that is lack of investor demand at this time. (Not to say that that might not change at some point in the future.)

Aside: At the same time, I would like to get more information on the chronic premium problems with the silver Eagles.

I was asked some time back to find out what I could about the possible silver shortage and I did make some phone calls and got a quick education. I'll reduce my findings with respect to the future of silver to two words and let all of the silver bulls sort out their meaning:

Warren Buffet

One must also take into consideration, as I said in the ABCs of Gold Investing, silver is a solid inflation hedge but remains to be proven as a deflation hedge. What that means is that one would not hold onto a silver position through thick and thin like they would gold. At the same time, for those looking for a spec, silver has some merit -- once the role of "he who holds the keys" is fully understood.

Personally, for a spec item, I like palladium at these prices better, but that's a personal preference and not investment advice as such holdings are very risky to say the least. Lastly, I would consider either play a minor aspect of the portfolio with gold playing a much more aggressive, prominent and central role (given the times in which we live.)

http://www.dailyreckoning.com/body_headline.cfm?id=1548 - Did it uccur to you what was meant to be achieved by the
SEC after 911 to relax stock buy back regulation? Not that it hasn't been used before, though bad economic politics can be blamed without impudence to the atrocious Attack on America.

The economic contraction is now taking on global dimensions - first time ever in history - and the wisdom of globalization of world trade becomes questionable. Of course, one could collate it to the EU and euro experiment, though the economies involved were not as far apart, as some imply. Coming from a small country, I can testify to that fact.

Having been very sceptical on the euro for years, I really don't subscribe to theories voiced here recently. While it's true the euro will be a (fiat) currency, without a country - and exactly that was the decisive point of the older european politicians like Helmut Kohl and Maggie Thatcher (the only socialist being HK's good friend Francoise Mitterand - the only french socialist I'd prefer any day to Jacques Chirac, btw.), namely to build a political unity via the necessity of having to pull together under a common currency.

The "socialistic" eurocracy as a semblance to communistic
central planning is not only absurd, it's also in stark contrast to the reality - or why would the former eastern block countries be eager to join the EU.

Todays politics and economics seem to be orbiting around a $-Reserve system, which well may be the illusion of an upside-down world, where new imperialism is trying to replace old feudalism - be it absolute or just brute!

In my haste to get the earlier post up, I neglected to say that I was trying to verify Rhody's assertion on 100 ounce bars. We've got the same problem with 10 ounce silver bars AND ten ounce palladium bars -- all for the same reasons. MK

An old saw, inspired by the HEADLINE: Argentina's De la Rua meets Fed, bankers in NY

http://biz.yahoo.com/rf/011109/n09175645_1.htmlIf you fall into financial trouble and you owe the bank $1 million, you worry. If you owe the bank $132 billion, the bank worries.
---------
NEW YORK, Nov 9 (Reuters) - Argentine President Fernando de la Rua met Wall Street bankers and Federal Reserve officials on Friday in an uphill battle to win support for an emergency debt relief plan aimed at staving off financial collapse. ...[seeking a plan for] the nation's creditors to swap most of Argentina's $132 billion debt for loans paying lower interest rates.

...Failure to service its debt, many economists fear, could prompt Argentines to pull their money out of the banking system and force the country to scrap its currency peg to the U.S. dollar designed to ward off hyperinflation.

A meltdown in Latin America's third largest economy could sent shockwaves across the region, potentially drying up credit to other emerging market nations and threatening a global economy already at the brink of recession.
---------

Bottom Line: Too big to fail. Simply put. The "strong dollar" as you have known it is in its final stage. The wheels will fall off the legacy international use of the "dollar reserve" standard. Believe it.

Call Centennial today to get YOUR gold order in the pipeline for delivery.

I do not disagree with yours (and W.B.'s) position for holding silver but have found some differences in our respective researchs with refineries. Two refineries contacted, one by myself and one by Rhody (J/M in the latter case), revealed that they do indeed still manufacture 100 oz bar sizes. Both Rhody and I did this because of a similar assertion that 100 oz bars of silver were no longer being produced. A Mr. Kaplan over there on Kitco made this assertion about a month ago.

The shortage that is just now being realized (most visibly, it seems) with 100 ozers could reflect the physical market place depletion in response to increasing (speculative and recent) demand beginning to be seen and reported. I presume the (larger) refiners will wait for an accumulating pile of orders whereupon a production run will be commenced. The business I contacted simply wanted to know how many I wished to order. However, this gentleman did not indicate when the orders would be filled - whether a back-order situation would be the case- and FWIW I got the impression that he had supply then and there.

In addition, and keeping W.B.s speculative statement in mind, speculators would indeed find 100 oz bars of interest. The industrial sizes would not be of speculative interest. I think the speculators are smelling hyperinflation in the future just as I am.

In the meantime I'll encourage Rhody to comment on this, but do not feel that his views would differ significantly from mine.

Thanks for the additional researches and comments. I found your statement about the possible shortage of ten ounce bars also very interesting. I too have noted this locally - but the 5's and 1's are still plentiful. A liquidity "backwardization" (smile) and a confusing one.

We gold advocates never had it so good. Too excellent minds with wide-ranging interpretations of economic theory, history, intrigue, and opinion. More than a few fundamental disagreements, yet, they both recommend gold!

Washington, Nov. 9 (Bloomberg) -- Prices paid to U.S. factories, farmers and other producers fell a record 1.6 percent in October, government figures showed, as some companies charged less for their goods to spur sales in a slowing economy.

Declines for automobiles, food and gasoline paced the drop in the producer price index last month, the Labor Department said. The index had risen 0.4 percent in each of the previous two months. The core index, which excludes food and energy, fell 0.5 percent, the largest decline in eight years.

``We have seen some of the worst conditions'' in 30 years, Pedro Reinhard, chief financial officer of Dow Chemical Company, told investors this week. ``The good news is that this is likely as bad as it's going to get.''

The leaders of modern economic theory, the brilliant Austrian School, will tell you that inflation is on the horizon with the increase in money supply. The Milton Friedman's will tell you that declining prices lead by the PPI decline will indicate inflation. Any opinions?

BR549

@cb2-Speaking of brilliant Austrian's, it is always good to see Dr. Kurt.

Washington, Nov. 9 (Bloomberg) -- Prices paid to U.S. factories, farmers and other producers fell a record 1.6 percent in October, government figures showed, as some companies charged less for their goods to spur sales in a slowing economy.

Declines for automobiles, food and gasoline paced the drop in the producer price index last month, the Labor Department said. The index had risen 0.4 percent in each of the previous two months. The core index, which excludes food and energy, fell 0.5 percent, the largest decline in eight years.

``We have seen some of the worst conditions'' in 30 years, Pedro Reinhard, chief financial officer of Dow Chemical Company, told investors this week. ``The good news is that this is likely as bad as it's going to get.''

BR-The leaders of modern economic theory, the brilliant Austrian School, will tell you that INFLATION is on the horizon with the increase in money supply. The Milton Friedman's will tell you that declining prices lead by the PPI decline will indicate DEFLATION. Any opinions?

BR549

@cb2-Speaking of brilliant Austrian's, it is always good to see Dr. Kurt.

I believe I read that the average household savings in Japan is $115,000. A large part of the Japanese economic problem is fear on the part of the Japanese consumer to spend.
Japanese lending rates are near 0, yet no one wants to borrow.
What is keeping the Japanese people with savings from borrowing yen to buy physical gold with the physical as collateral for the loan? (if yen is exchanged for dollars to buy gold would this not fit into the Japanese government low yen/high dollar policy, at least until gold rises and the investor/consumer spending kicks in)
Individual investment in physical gold by the Japanese could result in large gains as the demand overwhelmed supply. I would think a windfall of 100,200% would result in consumer spending and help the economy. Some of the windfall would find it`s way into the market and help the banks holding stock assets.
What would it do to the Yen? increase in value? If 60% of their economy is home based would it not be better to have their own people spending rather than worrying about a low yen to aid exports? After all nobody is buying exports anyway. U.S. is tapped out.
Why would it not be "beneficial" to the economy and the banks to direct the Japanese consumer into physical gold and gold company investment?
Perhaps Jipangu and the "supposed whiz" who runs it is not just an individual. Perhaps he has many friends and investors in high places.

Someone please comment on what "would" happen if the Japanese consumer was gently directed by the government and banks into borrowing to buy physical gold.
Would it be worth it to the G8 to allow golds rise in the hands of the Japanese consumer if it meant the Japanese economy could get back on track ?

The sudden and steep decline in POG (-1%)(280,65$ > 276,65$)
and at the same moment a spike up of the POO (+ 10%-18,85$ > 21$) is a technicality or a politico move by the arbitrageur par excellence : Rothshield's ? This happened while CNBC-analyst's were trumpeting about a POO target of 15$. Russia was/is the uncooperative non-cartel spoiler .
At a time when the major taliban-reformists are crossing the globe for having talks between 4 eyes.
My point is that the POO in the current context(s) remains oh so very, very important.

Auspec/SDR : Creation of additionnal SDR's and renewed allocation, whilst replacing Gold-reserves, doesn't get the attention it deserves. What is or will be the proportion of the $/� in the SDR's currency basket ? And does the IMF has an agenda of disposing off its 3.000 tonnes, as originally suggested before the WA ?
The IMF never produced a study on the POG explosion post 1971.
Do official organs, keep their Gold reserve, only, as a psychological confidence/trust keeper in fiat and SDR ?
Why is everything, but Gold, so well explained within these official bodies ? Any currency / interest rate / commodity or stockmarket, move is extensively argumented with possible reasons why it moved...but POG moves, receive no comment or justification at any dept.
Nobody is demanding some transparency on official Gold holdings (officials to officials).

There is no sign of reaction from the states who are negociating their SDR (re)allocation(s) and their Gold-reserves. Does that give us an indication on the allocated value of the yellow ?
Do you have any clue on this, good knight ?

Get well soon! I too find inquisition tiresome and essentially incompatible with digestion.

I am (to the extent possible on a forum) of "family" orientation as well and hope that my good wishes for your health find you already much recovered.

ORO appears to have magically transformed himself from a venerable voice with gravity to something resembling a prodigal son.

As time heals all (well almost all) wounds so will it reveal the course of our destiny. I look forward to the day when disagreement on matters of principle (and in particular concerning something as fleeting as the relative merits of systemic fiat administration) remain civil especially when conducted within a venue with such a long history of good and powerful messaging.

When I think of the current American governance (rep/demo one and the same), I am reminded of the passage by Benjamin Franklin from "The Way to Wealth"

(Frugality III)
"...But Ah! think what you do when you run into debt; you give to another power over your liberty. If you cannot pay on time, you will be ashamed to see your creditor; you will be in fear when you speak to him; you will make poor pitiful sneaking excuses, and by degrees, come to lose your veracity, and sink into base downright lying; for 'The second vice is lying the first is running in debt' as Poor Richard says; and again, to the same purpose, 'Lying rides upon Debt's back:'..."

end excerpt

The following...with apologies to Frank Herbert

Well resource management is now in full swing with the family houses of the "Landsraad" in mortal combat for control of the spices. It is the sale of the addictive spices to their own countrymen that funds their continued insanity and consolidation of power. It funds the interest payments on loans used to assemble incredible derivative positions each designed to trump the pre-positioning of the warring households before them.

Now all attention is focused on that area of the known universe with the demonstrated potential of cheaply producing 75% of the spice demand. A temporary supply glut of spice has opened this window of opportunity to establish spice production to north under the control of indulgent allies as the former growing fields under control of opposition families are pummelled to make way for a pipeline that will funnel the isolated fuel production resources of the new allies into markets able to be controlled by the dominant western regimes. They thereby cut out the middlemen who would otherwise control the end of an eventual alternate routes through the great eastern houses and then to the sea.

The fuel not only allows the transport of food and mercantile exchange but rapid transport the spice by air as well. Many camel caravans and mechants are therefore circumvented in the movement of spice for maximum profit. The control of the fuel production provides the illusion of ultimate power among the warring households. But it is the spice that fills their illicit coffers. The paradigm is clear...control the spice trade and the universe will align itself about you. Truth be known, the spice can be produced anywhere. Anywhere but in the midst of those who would buy it.

Do we not find it amazing that such battles congeal along the route of the old "silk" trail? Was it spice that was exchanged for silk back then. Did the silk traders start their own spice production to leverage their silk pricings?
Both silk and spice are much lighter than gold. Silk has become irrelavant. Spice has not. Has gold? I think not.

And then from the seat of civilization and colonization comes a call for sanity. A new medium of exchange. One not connected with a war machine or covert profits from the spice trade. One that simply exists to facilitate the exchange of value for value. Excess profit to be stored in the vehicle of that which does not diminish with time. Stored for use in lean times as the squirrel gathers nuts for the winter. The simple is often right when profit and the pursuit of power over others is not the end motive.

And look at the track record of a country which has already defaulted 10 times (make that 11 with a potential for many more). They must have not been able to wring out their citizens bank accounts to the last devalued peso.

I still smell BAILOUT. The only question is which entity will it come from--the IMF, BIS, Fed, or The World Bank.

I hope that ORO will never be discouraged from his postings on this forum. Or if he is, that somehow I will be privileged to read his writings elsewhere. In past years I have read USAGold to try to get an education in the realities behind the official smokescreen of our economic situation, and the potential for using physical gold ownership as an investment, and as I grew in understanding, insurance for my children's and my friends savings. The most consistently interesting and intelligent postings for me have been those of the gentleman and obvious scholar who calls himself ORO. Reading his postings and sometimes getting his reply to my questions, has been like following a supremely interesting detective thriller, chapter by chapter.
No one else who posts here or anywhere else that I know of brings the same breadth and depth of knowledge, and insight, and ongoing research to this subject. In fact, I owe it to his writings that I now find myself able to critically understand what I read in my daily paper, the woefully inadequate declarations of financial analysts, economists, government finance ministers, etc. etc. ORO has developed unique insights into the economic pollution which we all live in, totally unaware of its malign potential. It is as if the water were polluted, and we did not yet know it, and were blissfully accepting the assurances of the water board, and the government regulators, that all was well. ( a poisoned well!!). I too was trained as a chemical engineer. I understand the scientific attitude, and the methods of science. I can say with absolute certainty that ORO is an elegant practitioner of both. His postings, as often as they appear, are the only ones which bring to me new insights into the structure of he economic fabric of my world. Most everyone else I read is just repeating what they have already said, exclaiming one more time about the necessity to buy physical gold, talking excitedly about the rise and fall of various indicators, The DOW, The NASDAQ, The POG, The CPI, The NAPM, The MZM, The M3, The USDX. Of course, this is interesting, in the way watching a thunderstorm approach across the open sea, or the open Prairie, is interesting. I also want to hear serious and useful attempts to understand the forces at work of which these indicators are only a symptom. ORO relates his analysis to the daily life and work of people like me and you, to a consistent framework of necessary and sufficient conditions for a viable economic framework for our lives. I frequently don't understand him. I always find that my efforts to understand are well repaid.

Galearis/WAC(Wide Awake Club)#65006/65003 - We have(I mean "had")the 1kg size also here in Auckland with some 2kg's around. The brands were a mix of o'seas J & M, Deak etc and local NZ & Australian refiners brands also. 1kg orders can be filled by ordering through Australian sources with delivery around 2-3 weeks.(1kg approx 2.2 pounds)

Michael(65008)Thanks Sir for the research, appreciated. This will certainly be a market to watch in the days ahead with still a number of pieces of the jigsaw to be filled.
- Netking

Great posts from Leigh,Mr.Gresham and Goldfan on the ORO/FOA disagreement.

Both of these gentleman completely enthrall me with their far-sighted outlooks of the future and re-examinations of historical events that have shaped our collective destinys.
They both contribute so much here and we are all much appreciative of their efforts.

With the market in overnight fed funds trading soft at 1.94 percent, the Fed's trading desk entered the open market anyway to add $6.005 billion to the reserves of the nation's banking system through six-day repurchase agreements accepted at a stop out rate below the new FOMC target of 2 percent.

Easy money. How fast will international confidence wane? Diversify into gold and then sit back to watch with financial/emotional impartiality.

The obvious answer: Unlike the 1970s, when inflation hit nearly 13%, the dollar remains the world's strongest and most sought-after currency in spite of economic slowdown, lower interest rates and even terrorist attacks.

Even though the Federal Reserve has pumped billions of dollars in liquidity into the economy, starting last January, we haven't seen a whiff of inflation. One reason we haven't seen inflation this year is that much of that newly created money merely offset the trillions of dollars that melted away in the stock market decline of the past 18 months.

If you define inflation as a phenomenon of too much money creation or too much money chasing too few goods, you're faced with this reality. The world is more awash in goods than in dollars and consumers who are badly shaken by terrorist attacks and anthrax scares. With little fear that the dollar may tumble badly, there's no reason to turn to gold as a safe haven.

Some 30 years ago, when inflation was high, gold's enthusiasts could generate plenty of excitement. And two of the most prominent gold bugs of the time, while not roaringly bullish today, still advise keeping a small position in gold stocks. James Dines and Howard Ruff are two legendary names in the world of gold investing. Each made a fortune for himself and his subscribers in the 1970s by predicting soaring gold prices. But when the bull market in stocks erupted in the 1980s, gold was crushed. Each says he led his followers out of the gold market in time to preserve those gains, though some challenge that assertion.

How do they view today's situation?

Dines: Take advantage of the uptrend
James Dines has been editor and publisher of The Dines Letter since 1960, one of the longest-lived advisory services around. Dines, who proclaimed himself The Original Gold Bug back in the 1960s, made his reputation as among the first to predict that gold would be freed its then government-fixed price of $35 an ounce and move substantially higher. Then, he predicted the price of gold and the Dow Jones Industrial Average would cross. They did. Gold soared to $850 in early 1980 as the Dow was tumbling down to nearly 750.

Dines got off the gold bandwagon and bet on stocks in the �80s and became a big Internet proponent in the mid-1990s. But he guided subscribers out of most Internet stocks in 2000.

In the meantime, he's had longstanding "buy" recommendations for gold stocks, including Agnico-Eagle Mines (AEM, news, msgs), Franco-Nevada (CA:FN, news, msgs), ASA and Barrick Gold (ABX, news, msgs), as well as Battle Mountain convertible bonds. Today Dines says: Gold mining shares have remained in surprisingly determined and unnoticed uptrends for the last year, just as the tech sector has been crashing. But few people have noticed gold.

Indeed, even if bullion prices haven't gone anywhere, the stocks and stock funds have. Precious metals funds have been among the top performers in 2001 -- a year where investing in stocks generally has been awful.

Dines sees a major recovery in gold prices during the next big currency crisis. He see it erupting first in Argentina or Brazil some time next year and affecting all of Latin America, including Mexico. He expects that the response to a currency problem will be similar to the 1997 flight to gold when Asian investors turned to the precious metal as their economies and markets collapsed around them. But Dines strongly favors gold shares instead of bullion, because gold shares pay dividends and tend to move ahead of the price of the metal itself.

What's holding the price of gold flat is the relative strength of the dollar itself, Dines says, and that precludes a major rise in gold in this country. But his newsletter shows charts of gold prices denominated in Canadian dollars, Australian dollars, South African Rands and Indian rupees. In all of those those currencies, gold clearly has been rising -- but so has the U.S. dollar. And you can earn interest, albeit low, on dollar deposits.

Ruff: Prepare for the worst
Howard Ruff became a regular on talk shows and in newspapers thanks to his 1977 best seller, "How to Prosper During the Coming Bad Years," which sold more than 3 million copies. Ruff's centerpiece advice was to buy gold at $125 an ounce, which was great advice because gold was about to take off.

Ruff continues to have a following for his newsletter, Ruff Times, which appeals, he says, to salt-of-the-earth, God-loving and God-fearing people who love their country, but fear and distrust their government.

But he says the markets have humbled him. After gold peaked at $850 an ounce, it has trended downward -- with the occasional uptick -- ever since.

Nonetheless, he's willing to predict that in the long run, gold bought at today's prices is going to be worth a lot of money at some time in the future. When pressed about how far away that future might be, he said, "Not tomorrow, or next week, but perhaps one, two or three years from now, it has the potential to be worth $2,000 an ounce."

In the meantime, Ruff has been telling subscribers to buy Treasurys, even at today's low yields, because he expects rates will fall further. And he still advises his followers to store non-perishable food supplies as a precaution against a worst case.

Other alternatives
Gold is not the only alternative if you're worried about the value of the dollar, of course. The euro will become the only currency of Western Europe in two months. Gone will be the opportunity to speculate in French francs, German marks or Italian lira. Close cooperation between European nations will be required, a process that has already started. But do you want to bet your life savings on the euro?

Asian and Latin American currencies have their own well-advertised problems. In fact, many of those countries see pegging their currencies to the dollar as the ultimate solution to their economic woes.

Still, there could be alternatives other than gold or foreign currencies, if speculators turn bearish on the dollar: soybeans, possibly, real estate or crude oil again.

Gold's glory gone?
It could well be that the world that sought refuge in gold no longer exists. Today's global speculators can move hundreds of millions of dollars with the click of a computer mouse. Since gold has to be stored and insured and guarded, it is costly to own, making its portability less of an allure. The tons of gold reputed to be stored in Comex vaults in the lower levels of the World Trade Center are, for now, inaccessible. [some now recovered, not reported how much]
At the same time, the financial markets were up and running in a week.

So what role, if any, should gold play in your investment portfolio? Gold bullion doesn't have much of a place, in my opinion, though I am partial to gold jewelry. But dividend-paying gold stocks or precious metals might be worth another small look in a diversified stock portfolio. They certainly provide a hedge against other positions. And most have been moving up. You can purchase shares of individual gold mining companies, or there are many mutual funds that specialize in gold shares.

But the best reason for owning at least some gold stocks is the fact that you're laughing at the very idea. My editor did, too. Nobody's out there writing about gold stocks, or publicly recommending them. Just as nobody wanted to be laughed at for recommending the sale of dot-com and technology stocks two years ago. Experience has taught me that just when everyone thinks an investment idea is absolutely ridiculous, it's time to take that idea seriously. The only problem is, you'll never know how much time it will take before people catch on.

"I refuse to use hateful words that escalate anger. We never know who is near an important edge in their lives, especially not on posting boards and in chat rooms. For all I know, someone I yell at might have just lost their dog, their job and their wife and they're on the verge of suicide or murder - I refuse to add one hateful word because when someone is on an edge like that sometimes all it takes is one more hateful word. Or maybe they're not near an edge but they're important in the life of someone who is... it all ripples."

Thanks, Henri. I sometimes think I tend to play the role of "peacemaker", which is usually the approach adopted by one of the children in an alcoholic household, though my family was as far from that as possible. (However, the resulting naivete led me in my 20s to walk blindly into relationships with other practicing alcoholics which tagged me pretty good.)

Goldfan: You described Oro's impact on me pretty well, too. The "detective thriller" especially. Between him and FOA, my consumption of financial newsletters has dropped radically. I was thinking last night after I posted how I can enjoy the challenge of reading and learning from someone whose studies and knowledge surpass my own, but not necessarily accept their conclusions, until I have digested all the links that got them there. Suspending judgment, while acting judiciously (I hope).

In the case of all this worldwide financial skulduggery (smile), perhaps "asking good questions" is the best we can hope to do for quite awhile? Of course, anyone offering firm-sounding answers in such an environment exposes themselves to challenge, but it should be the challenge of fielding good questions, and responding with quality answers. That's what both of them have done here, and which earns them the appreciation we voice in a time of conflict.

Maybe our "detective thriller" is to explore the areas of their disagreement with our own growing understanding and questioning?

The challenge for the teacher/leader is to help the others follow a pathway that lets them see the conclusions for themselves, not by a blind acceptance. This is the essence of the scientific method, of education, and, if I'm not mistaken, of democracy. And this is what I'm sure our two esteemed posters believe in, too.

"In a little-noticed announcement, the Center for Strategic and Budgetary Assessments has made a stab at estimating the direct costs of this splendid little war against Afghanistan. In the past this group has provided a very useful service in telling us exactly what the Pentagon is loath to talk about: how many taxpayer dollars our military central planners are plowing through on any given day. The Center has an excellent track record. This time they have come up with a pretty scary figure: $1 billion per month.

That number is based on past costs of deployments of warships, aircraft, and special forces in the Gulf War and the War in Kosovo, relative to the number of sorties flown and the number of troops actively deployed. They cross-checked their estimates with a bottom-up and a top-down method of calculation, while freely admitting that the estimate could be off by a few hundred million here and there (and government is always more expensive now than in the past). . . .

. . . . In the the weeks since September 11, the Federal Reserve has zoomed the money supply (as measured by MZM) at an astounding rate of 35 percent (annualized)--an amazing fact when you consider that the economy has actually shrunk during this time. The demand for dollars has gone up due to higher savings, but not enough to permanently sop up all that extra cash sloshing around the world today, thanks to an incredibly irresponsible policy.

So, yes, you will pay for this war, and you will pay through the arteries. Wave your flag and whoop it up while the party lasts, but never believe that the only thing being destroyed are mud huts and their inhabitants. The hangover will arrive right here at home, and the destruction will be all too evident for everyone to see.

blow-pipe that bullionIn my opinion product from small refineries should be purchased last - in preference to "name" bars like Engelhard and J/M's. They may be stamped 99 fine, but I have found some of this to be sterling grade -or less(!) (on a blow-pipe test for copper). Especially novelty rounds. I have been burned before on this stuff and one can often see this suspicion reflected in prices now on ebay for these items. The "names" go for the higher prices....

Be careful of the sleaze, my friend.

If this message gets around we will all be burdened by assay costs subtracted from the profits. Suggest you buy these at a discount (they often are) as a hedge as you would with junk silver coin, collectibles or direct barter.

Below is a clip from William Fleckenstein over at Grant's Investor. Registration is required but well worth it. I don't think he would mind my sharing the following from his column yesterday.......

I recently received a rather stunning e-mail on the subject of how Ollie North viewed Osama bin Laden 15 years or so ago: "At a UNC lecture the other day, they played a video of Oliver North during the Iran-Contra deals during the Reagan administration. There was Ollie in front of God and country getting the third degree, grilled by some senator who asked him, 'Did you not recently spend close to $60,000 for a home security system?' Oliver replied, 'Yes I did, sir.' The senator continued, trying to get a laugh out of the audience: 'Isn't this just a little excessive?' 'No, sir,' continued Oliver. 'No? And why not?' 'Because the life of my family and I were threatened.' 'Threatened? By whom?' 'By a terrorist, sir.' 'Terrorist? What terrorist could possibly scare you that much?' 'His name is Osama bin Laden.' At this point, the senator tried to repeat the name, but couldn't pronounce it. A couple of people laughed at the attempt. Then the senator continued: 'Why are you so afraid of this man?' 'Because, sir, he is the most evil person alive that I know of.' 'And what do you recommend we do about him?' 'If it were me, I would recommend an assassin team be formed to eliminate him and his men from the face of the earth.' The senator disagreed with this approach, and that was all they showed of the clip. Fifteen years ago, the government was aware of bin Laden and his potential threat to the security of the world."

Max: Par for the course. Congress often seems more interested in posturing for votes than getting involved with anything sticky. Good to see them called on it now and then. The moral here is to not rely on the government to protect or take care of you. They are not up to it. They don't even have a stock of potassium idodine! I like Black Blades advice. Get out of debt and have the essentials at hand, including the physical.

... Sorry, I might be too dumb to answer CM's exact and current question re the euro - though I (personally) feel that it will have to work.
- Not so much as a $ -Imposter, though as a valid "currency" for a united EU and its neighbors - an economy, which may become more important in size than a globalised $'-rized hegemony with too much antipathy, due to its inherent imperialistic tendency.

"Chinese gold buying continues unabated. Soon a gold market will open in Shanghi and that could mean off take of 600 tons of gold a year equal to India's purchases and the Chinese market could be four times as large due to higher GDP."

"Japanese purchases of gold investment products, such as bars and coins, were 10-15 tons in September, nearly four times the monthly average for the first eight months of the year. Merchants see even higher purchases in the months ahead as demand for safe assets continues. As the yen weakens the flight to quality will pick up speed. Japanese savings protection by the government, like our FDIC, goes from full coverage to a maximum of $82,638 starting in April. We see a deluge of funds going into gold. What sane Japanese wouldn't switch funds over that limit to gold with most of the banks already insolvent? Average household savings is $115,700."

Comment: Which CB will provide the gold to these Japanese diversifiers?

Last night he walked up to the threshold, tonight he went through the door

From the 'Dow Theory Letter' tonight:

"...Dec. gold up .60 to 277.70. E-mailer tells me that every time gold is ready to break out, Goldman Sachs dumps on the yellow metal. I don't doubt it. What is it -- Gold-man sacks gold? Ah hah, the secret is out. ...'
*********************

The link above providing very impressive (bordering on magnificent) desktop wallpaper of these bars...It's the big one there in the middle. Thanks to BIGGY (who just became a grandpa for the second time) for this link.

"If you are disciplined and consume less than you produce to save the difference to try and build a better future, Greenspan has targeted a laser-dot on your forehead and is tightening his finger around the trigger that will blast a .50 caliber bullet through your financial dreams."

"Savers, investors, and creditors have been declared second-class citizens by the Greenspan Fed. If you believe that equities are overvalued or you have worked hard all your life to save capital and now you need fixed-income for retirement, outright war has been declared on your hard-earned savings and bond investments. Alan Greenspan, in his desperate bid to bailout equity speculators and debtors, has destroyed all incentives for savers to lend their money as real interest rates (one-year Treasury interest rates less inflation as measured by the watered-down CPI) have plunged negative for the first time in two decades."

"No nation was ever made great and no individual ever achieves grand wealth through debt-financed spending binges. Only by sacrificing now and consuming less and saving for the future can capital accumulate and fortunes grow. By deliberately torpedoing the massive debt market and making lending a losing proposition for savers, Greenspan is forcibly shutting-down the single biggest engine of innovation and capitalism on the entire planet."

"If savers are by decree not allowed a fair return, and they cannot consummate mutually beneficial transactions and earn real income from their valuable savings, they will hoard their capital and innovation and economic growth in the United States will slow to a trickle and then painfully grind lower and lower. By forcing real returns for savers negative, Greenspan has declared unrestricted warfare on the hard-working savers in the United States and abroad and he is unleashing forces that will ultimately have dreadful consequences for America." END

Will the new Chinese deregulated gold market require US intervention to keep the gold price in check? Most likely.

The US gold manipulators will be forced to intervene in Shanghai so as to avert a runaway situation when affluent Chinese entrepreneurs place their financial bets on gold. This action will in turn require even greater dishoarding of US gold reserve assets, hastening the day of final accounting. A single day of stupendous import.

How much is left? Maybe the SDR draw down is a clue. An unprecedented 87% reduction in the ESF's SDR account. What seems sure is that Treasury wouldn't be begging tiny nations including Bangladesh for their puny 3 tonnes [as they did in 2000] if there were an ample gold supply. The scheme of selling US reserve assets is a one way, dead end street. Other games are unrevelling too.

The game of IMF double counting of World gold reserves is now in the open and festering...eating away at the credibility of the IMF (who denies it in the face of written validations from many IMF menber central banks), US Treasury and European financial minions. The IMF's own statistical accountants warned them at the IMF Santiago 1999 conference about double counting gold swaps and "loans". Even THEY refused to make recommendations on the gold loan double counting issues.

Like a panicked embezzler, the Master of the Universe keeps shuffling the books.
Now the long bond has fallen but gold still stands...ready for a counterattack in the Far East. Ready to devour the pretenders as well as the circus ringmaster...Greenspan.

http://www.snopes2.com/rumors/north.htmSorry. Bill Fleckenstein reported tonight that the e-mail story I posted earlier was a fraud. See the site above to debunk this and other stories. It's so easy to get information these days and so little time to check out their truth. The story played to my prejudices. How could I have believed our Senators to be so irresponsible?

HOUSTON, Nov. 9 -- International energy prices shot up Thursday with growing evidence of determination among members of the Organization of Petroleum Exporting Countries to curb production at their ministerial meeting next Wednesday. Markets got another boost early Friday when Russian Prime Minister Mikhail Kasyanov said. Russian oil companies also are prepared to cut crude exports.

Black Blade: OPEC will likely agree to a 1.5 million bbl/dat production cut and now Russia could cut as much as 500,000 bbl/day. If other producers follow suit, them inventories will fall quickly in spite of a severe Global Recession/Depression.

New York, Nov. 9 (Bloomberg) -- In the early 1960s, government officials sought to nudge interest rates lower in a maneuver dubbed ``Operation Twist.''

Some investors say the Treasury is doing something similar now, with undersecretary Peter Fisher's announcement last week that 30-year bond sales would be halted. Since then, bond yields have declined to 4.87 percent from 5.2 percent the day before.

``Washington has been somewhat annoyed'' that long-term rates haven't declined as much as the federal funds rates set by the Federal Reserve, said Paul McCulley, a managing director who helps oversee $220 billion for Pacific Investment Management Co. "

BR-The twisting of interest rates didn't work in the 60's; it didn't work for Clinton, and it may not work today.

Just four years ago Taleban officials were at the Texas headquarters of the US energy company Unocal to discuss building a gas pipeline across Afghanistan to Pakistan.

In the home of Islam's two holiest places, there is widespread sympathy for Osama bin Laden's aims as well as opposition to the US strikes, and that has left the traditionally pro-western royal family exposed. But the crisis means Saudi Arabia is more important than ever for the stability of world oil supplies.

"We're hostage to oil, that's as simple as you can put it. We have let the economic considerations take precedence," said Larry Johnson, a former CIA officer with close links to serving intelligence officials. Some say this crisis should be the spur for the US and other Western nations to make more use of renewable and other energy sources, to reduce their reliance on oil. But that will not happen overnight and in the meantime, the more pessimistic say the US has to be ready for the possibility of serious disruption to oil supplies because of instability in Saudi Arabia. One senior military figure who has served in top posts in